The Retirement fund body Employees’ Provident Fund Organisation (EPFO) will review a proposal today which prevented inoperative employees provident fund accounts from earning interest.
Inoperative EPF accounts are those where there have been no contributions by an employee or their employer for a period of 36 months. According to the Economic Survey for 2015-16, 15 crore employee provident fund accounts in India are inoperative.
EPFO had stopped inoperative accounts from accruing interest from April 1, 2011, to encourage employees to withdraw their PFs or merge it with an active account. However, in view of the new PF rules introduced last month that bar employees from withdrawing their entire PF amount till they turn 58, inoperative accounts not accruing interest is seen as an injustice against workers, who save their hard-earned money in PF and hence the reason for the review.
There is close Rs 27,000 crores worth of deposits in inactive accounts.