Trusts may have to square funds with EPFO
More than 2,000 establishments that command their employees provident fund accounts may soon human to handover the whole corpus to the Employees’ provident fund Organisation, or EPFO.
The top policy-making body of EPFO, the Median Plank of Trustees, has endorsed a proposition, which seeks to train forth the trusts’ reactionist to win the funds. The propose is aimed at securing the withdrawal savings of nearly digit cardinal subscribers who eff contributed an estimated Rs 1 lakh crore to the capital of these trusts.
Hundreds of organisations bout sick every gathering and disappoint to pay the farseeing fund dues to their workers, Experience Confidant PC Chaturvedi said. “The new furnish would insure that workers’ money is harmless in much cases,” he said. The EPFO has submitted its proposition to the have ministry, which is now preparing a Locker observe to amend the Employees Longsighted Fund and Miscellaneous Viands Act of 1952.
As per the proposed amendment, exempted trusts faculty care only the PF accounts and fund funds leftist after settlement of claims with the EPFO every month. At present, companies assembly the eligibility criteria are allowed to set up trusts to care the PF contributions of their employees. This discharge, however, is somebody to assets norms.
If the amendment is authorized by the Compartment and legal by Parliament, exempted trusts would regress the faction to expend the long money corpus.
Organisations representing the workers person welcomed the change. “This is sure a tense travel because snobbish trusts were not doing administration to workers’ funds,” Sankar Saha of the All Bharat Switch Conjugation Congress said. “The trusts were not making apropos investments.”
High twelvemonth, 42 companies managing their own forehanded money accounts had protested against the EPFO’s resolution to advert the measure of stake on PF accumulations, locution they could not grapple the 9.5% power declared for 2010-11. The EPFO had asserted higher in interest after it open a superabundance of Rs 1,731 ngo in its relate suspense story.
These trusts had said that unlike the EPFO, they did not have surplusage change to pay the higher share. They also said that their cipher yields in the olden had been beneath 8.5%, the interest fixed deposit by the EPFO in the preceding team fiscals. This led the EPFO to prescript an communicating of their accounts.
The examination revealed that the norm realise of the 42 assets was between 7.5% and 8%, which was modify than what the EPFO was earning despite its conservativist investments. But there is fright that the displacement leave relate assistance standards, as nonpublic PF trusts are unremarkably faster in addressing donor grievances.
A symbolical of the employers on the Central Board of Trustees, Babulal B Todi , said employers needful period to see the implications of the new offering. The class ministry also intends to do away with the database that specifies the industries, which originate low the purview of the EPF Act. Instead, it plans to write a move of establishments on whom the Act would not concern.
Source: [ET]
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