Revised rate of interest - with regard to Staff Provident Fund in EPFO

Revised rate of interest - with regard to Staff Provident Fund in EPFO EMPLOYEES' PROVIDENT FUND ORGANISATION (MINISTRY OF LABOUR & EMPLOYMENT, GOVT. OF INDIA) HRD/3(2)2012/SPF Date : 16/05/2013 To All Additional CPFCs, All RPFCs, Regional Offìces, including RPFC (ASD), Head Office, All Officers In-charge of SROs   Sub : Revised rate of interest - with regard to Staff Provident Fund in EPFO.   Sir, Please refer to the Resolution dated 08th April, 2013 issued by Ministry of Finance (Department of Economic Affairs) regarding declaration of rate of interest of General Provident Fund (GPF) and other similar funds. 2. In this connection, it is announced for general information that during the year 2013-2014, accumulations at the credit of subscribers to the Staff Provident Fund shall carry interest at the rate of 8.7% (Eight point seven percent) per annum w.e.f. 01.04.2013.   Encl: as above Yours faithfully, sd/- (R.K.KUKREJA) Add,. CPFC (HR) Source: www.epfindia.com [http://www.epfindia.com/Circulars/Y2013-14/HRD_SPF_4677.pdf]

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Provident Fund Accounts through E-Mails/Sms

Provident Fund Accounts through E-Mails/Sms  PF Accounts through E-Mails/Sms  Status of sending the monthly details of the Provident Fund accounts to employees is as follows:  (i) The updated Provident Fund (PF) accounts are available online on the EPFO website i.e. wwe.epfindia.gov.in from August 2012 and the Provident Fund accounts of members are updated as and when the contribution is received. Members can view and take printout from anywhere any time.  (ii) Since April 2012, there is a facility for the employers to download the annual accounts slips for their employees from the accounting year 2010-2011 onwards.  (iii) The updated balance in EPF account can be obtained by an EPFO member through SMS by furnishing his PF number and mobile number by using “know your EPF Balance” facility in EPFO website.  (iv) The monthly details of Provident Fund (PF) accounts of EPF members are, presently, not sent through e-mails.  The Minister of State for Labour & Employment Minister Shri Kodikunnil Suresh gave this information in a written reply in Lok Sabha today. PIB 1.03.2013

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Reduction in Commission of PPF agents to make the Schemes more Investor Centric than Agent Centric.

Reduction in Commission of PPF agents to make the Schemes more Investor Centric than Agent Centric. The recommendation of Shyamala Gopinath Committee regarding agents’ commission was to reduce commission of 0.5% on Senior Citizens Savings Scheme (SCSS) and 1% on Public Provident Fund (PPF) to zero, reduce 4% commission under Mahila Pradhan Kshetriya Bachat Yojana (MPKBY) to 1% in a phased manner and to reduce 1% commission for all other schemes under Standardised Agency System (SAS) to 0.5%. The Government, after consulting all the stakeholders and the representations received, has decided to reduce the commission under PPF and SCSS to zero and under SAS to 0.5%. However, commission under MPKBY continues to be at 4% for the time being. The main intention of these recommendations is to make these schemes more investor centric than agent centric. Representations of Small Savings Agents’ Association from various states including Mumbai were received in the past. Taking into account large number of representations received from Small Savings Agent’s Associations, Members of Parliament, other dignitaries and others, the Government accepted most of the recommendations of the Committee. This was stated by the Minister of State for Finance Shri Namo Narain Meena in a written reply to a question in the Rajya Sabha today. Source : PIB, 13 Dec, 2012

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Change in Central Government Investment Model for the Corporate Sector - PFRDA

Change in Central Government Investment Model for the Corporate Sector - PFRDA Pension Fund Regulatory and Development Authority 1st Floor, ICADR Building, Plot No.6, Vasant Kunj Institutional Area, Phase II, New Delhi-110070 CORRIGENDUM TO CIRCULAR Ref: PFRDA/CIR/1/Corporate-CG/1 dated 18th October 2012 Date: 31st October 2012 SUBJECT: Change in Central Government Investment Model for the Corporate Sector This Corrigendum is issued with reference to clause 4 (b) of our earlier circular No-PFRDA/CIR/1/Corporate-CG/1 dated 18th October 2012 on the captioned subject. The clause 4(b) of the above mentioned circular applicable for the existing Corporate Sector Subscribers under the CG Scheme has been revised as under: “The existing corporates under CG scheme are allowed a time period of 60 days from 1st Nov 2012 i.e. up to 31st December 2012 to choose any one PFM for shifting their assets. However, the investment management fee would be the same as the fee applicable to the NPS schemes under Private Sector as per the extant guidelines.” sd/- Deepa Kotnis (General Manager) Source: www.pfrda.org.in [http://pfrda.org.in/writereaddata/linkimages/Corrigendum%20-Circular%20Corp%20CG%20Scheme112754616.pdf]

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Finance ministry pushes for increase in PPF, post office rates:

Finance ministry pushes for increase in PPF, post office rates:  NEW DELHI: Faced with a cash crunch, the finance ministry is moving a proposal to increase interest rates on small savings schemes such as Public Provident Fund and post office deposits but politics may play spoilsport.  Official sources told TOI that finance minister Pranab Mukherjee will decide on the proposal over the next few days as small savings instruments have lost out to bank deposits that earn higher interest. As a result, the government has been forced to borrow Rs 53,000 crore more from the market by issuing bonds, a move that can increase interest rates further and also upset budgetary calculations.  If Mukherjee approves an increase in interest rates on small savings, your PPF will fetch you at least 8.2%, instead of 8% now, while senior citizens can hope to earn around 9%. In addition, individuals will be permitted to park Rs 1 lakh in PPF accounts instead of Rs 70,000 at present. Similarly, post office deposits will fetch 50-70 basis points higher (100 basis points = one percentage point).  But politics over two schemes are holding back a green light from the finance minister. Sources said the finance ministry has received several representations from individuals urging not to abolish the Kisan Vikas Patra (KVP), while nearly 5 lakh agents have opposed the move to cut the commission on Mahila Pradhan Kshetriya Bachat Yojana (MPKBY) to 1% from 4%.  Officials in the tax department have complained that KVP has become one of the biggest instruments of money laundering, a concern which was even shared by a high-level committee headed by former RBI deputy governor Shyamala Gopinath. In fact, maximum instances of misuse of KVP have been found around Amritsar, pointing to the possibility of Pakistani funds entering India. So, it hasn't come as a surprise that a significant number of petitions for the scheme's continuation have come from Punjab and Haryana.  "The ministry has received representations from various sections. They have demanded that KVP should not be discontinued as it is linked to farmers while the reduction in the commission for MPKBY scheme has been opposed on the ground that it will hurt the income of women agents in rural areas," a source, who did not wish to be identified, said.  Mukherjee faces another dilemma as MPKBY was started during former prime minister Indira Gandhi's tenure which raises fears of criticism from within the party, especially because women agents will be affected. It's a different matter, however, that the agency is in the name of a woman but the person hawking the scheme is either the agent's husband or another family member.  It is likely that the finance minister, the government's key troubleshooter, will settle for reducing commission to around 2%, which will also ensure that investors do not lose out on returns as commission eats up a certain portion of the returns every time funds are deposited.  An expert panel headed by Gopinath had recommended moving from an administered price regime to a market-linked interest rate system for small savings schemes that would translate into higher returns for now.  It has recommended closure of only one existing scheme - KVP -- while recommending continuation of all other schemes with some modifications. The committee also recommended that the investment ceiling in the popular Public Provident Fund scheme be raised to Rs 1 lakh from the current Rs 70,000.  Finance ministry officials said increase in the PPF investment limit would help garner about Rs 5,000 crore in the coming quarter if the small savings reform plans were implemented. This would also help the government tide over the tight fiscal situation and reduce prospects for any further increase in its market borrowings. The government has recently raised its borrowing against the backdrop of slowing revenues and less than expected receipts from disinvestment in state-run enterprises.  The government panel had said the continued popularity of both KVP and NSC among the urban population who are not all small savers could be prompted by an incentive to avoid tax. "As compared to NSC, KVP is more popular as it is a bearer-like certificate due to its ease of transfer. It also has an in-built liquidity due to the regulated premature closure facility offered in the scheme. In view of the recent developments on Anti Money Laundering/CFT front, the committee recommends that KVP should be discontinued," the report said.  The committee had also said that 4% commission under MPKBY was very high and was affecting the viability of the National Small Savings Fund. "The committee recognises that the RD scheme requires considerable effort on part of agents in mobilizing monthly deposits. However, 4% commission is distortionary and expensive. The committee recommends that this should be brought down to 1% in a phased manner in a period of three years with a 1% reduction every year," the report said.  Latest data shows investors are opting for bank deposits due to the increase in deposit rates. Between April and August 2011, retail investors withdrew nearly Rs 5,500 crore from small savings deposit schemes in post offices and certificates such as National Savings Certificate. Small savings schemes, most of which are exempt from tax, had attracted investment of over Rs 25,000 crore in the same period last year.  Source : The Times of India, October