There is more good news for provident fund subscribers after the higher 9.5% interest they got on their accumulations in the current year. The Employees' Provident Fund Organisation, or EPFO, says the surplus in the interest suspense account is more than the Rs 1,732 crore estimated initially after bulk of the subscriber accounts have been updated.
"After updating the interest paid to subscribers we find that we are well within what we had accounted for," Central Provident Fund Commissioner (CPFC) Samirendra Chatterjee told ET. He, however, declined to spell out the surplus that remained in the interest suspense account after updating pending accounts.
The surplus will give the EPFO cushion to maintain at least the 8.5% return even in bad years. The EPFO had announced a 1% higher interest rate for 2010-11 based on Rs 1,732 crore of excess funds it had discovered in its interest account. The finance ministry had ordered a special audit of the accounts it was not sure that the surplus was "real".
The CAG in its audit had said it could ascertain the quantum of surplus till all the subscriber accounts were updated. It said as on March 31, 2010 out of the over five crore EPF accounts, 4.72 crore accounts had not been updated, or credited interest. The finance ministry then ratified the 9.5% interest rate subject to the condition that the EPFO would update all 4.72 crore accounts of subscribers in six months time and if the surplus turned out to be lower, would adjust it against the interest rates for 2011-12.
The EPFO is the custodian of more than Rs 3 lakh crore of subscribers money. Labour minister Mallikarjun Kharge announced on Wednesday that only 60 lakh accounts of the total 4.72 crore remain to be updated, which would be done over the next two months. "This is a big achievement given the fact that accounts were pending updation for the last 25-30 years," Kharge said at a meeting of officers from 120 regional offices of the EPFO.
Kharge has set a deadline of December 31 for updation of each and every account and warned that officers who did not stick to the timeline would be punished. "The fact that the surplus in the interest account has turned out to be higher than what we had estimated will ensure that we will continue to have a comfortable fall back in case the interest rates announced by us this year or later turns out to be lower than what we earn," an EPFO official said.
In the last fifty years of the EPFO's existence, there have been very few instances when the interest announced by it has been higher than the actual earnings.
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