EPFO - Central Board of Trustees (CBT) approved the proposal to recommend for amendment in Employees Pension Scheme (EPS) 1995

EPFO

Central Board of Trustees (CBT) approved the proposal to recommend for amendment in Employees Pension Scheme (EPS) 1995

Ministry of Labour & Employment

CBT Approved Proposal to Recommend Amendment in EPS 1995
225th meeting of CBT held on 21st august, 2019 at Hyderabad

22 AUG 2019

In a major decision, the Central Board of Trustees (CBT) EPF in a meeting held at Hyderabad on 21 August 2019, approved the proposal to recommend for amendment in Employees' Pension Scheme (EPS) 1995 for restoration of commuted value of pension to the Pensioners after 15 years of drawing commutation which will benefit approx. 6.3 lakhs pensioners. This was a long pending demand of the pensioners.

The Minister of State (I/C) for Labour and Employment Shri Santosh Kumar Gangwar whose also Chairman CBT, while addressing the CBT expressed satisfaction that Employees' Provident Fund Organisation (EPFO) is settling more than 91 % claims of EPF members in online mode and lauded the efforts made to improve services for settlement of claims of family of deceased members and EPF call centre function 24 by 7.

He also appreciated the good governance strategy adopted by EPFO in saving of Rs.22 crores p.a. due to negotiating reduced OD charges increased FD interest and waiver of collection charges by SBI and further savings of Rs.50 lakhs p.a. due to reduction in collection charges by three banks and achievement of highest yield (8.55%) by Portfolio Managers since July 2015.

The Minister released the educative booklet on seasonal employees regarding special provision in EPS’1995 regarding eligibility of seasonal employees for pension. The contents of booklet brings out the Scheme provision that contributory service in any year, even if contributory period is less than a year is treated as full year of eligible service for seasonal employee and this will help dispel doubts in minds of members/employers.

The Chairman CBT also launched the revamped EPFIGMS 2.0 version which will benefit more than 5 crores subscribers and lakhs of employers by speedy and smooth resolution of grievances.

The Board approved the proposal for Selection and Performance Evaluation of next Custodian by the new Consultant which will be appointed on the basis of Report of Five Members’ Committee constituted by the CBT for the purpose.

In the matter of coupon default of IL&FS Ltd, the Board nominated three officers of Investment Division of EPFO to attend the Debenture - Holders’ Meeting that may be held in future and if need be, vote on behalf of the Central Board, EPF.

Selection of ETF Manufacturers: The Board approved the decision to choose the Exchange Traded Fund (ETF) manufacturers through public bidding by 30/10/2019, extension of the term of the present ETF manufacturers (SBI MF and UTI MF) till then and also to authorized the Finance Investment & Audit Committee (FIAC) to conduct the exercise of choosing ETF manufacturers.

Allocation of investment in Nifty 50 and Sensex: The Board approved the proposal that the fund allocation between Nifty 50 and Sensex ETFs be divided evenly, i.e. in the ratio of 50% to 50%.
Appointment of a Consultant in addition to M/s. CRISIL Ltd: The Board approved the nomination of members from employer’s and employee side in a Committee constituted to select and appoint a separate Agency/Consultant in addition to M/s. CRISIL limited, inter-alia to review the working of the Portfolio Managers (PMs), assist the investment Committee in redemption of ETFs, etc.
Appointment of Portfolio Managers for managing funds of Central Board, EPF: The Central Board approved Request for Proposal (RFP) document for appointment of Portfolio Managers and recommendation of the FIAC on appointment of Portfolio Managers.

Exercise of early redemption options available in DHFL Bonds: The Board approved for early redemption option in DHFL bonds recommended by FIAC.

Consent for Transfer of Non- Convertible Debentures (NCDs) of GSPC to GSIL: EPFO has total investment of Rs.2300 Cr in GSPC NCDs. The Board approved the transfer of NCDs of GSPC to GSIL, a wholly owned subsidiary of Govt. of Gujarat and a better rated company which had made an offer to take over debt of GSPC with budgetary support of Government of Gujarat
Legal Entity Identifier Code (LEI) for participation in non- derivative markets by EPFO: In Nov’18, the Reserve Bank Of India (RBI) issued advisory to all eligible market participants in the Financial Markets to obtain LEI Code. The Board approved the nomination of the EPFO Officers as the authorized Officials to obtain LEI Code.

Withholding Investments in bonds of private sector companies: The CBT approved the decision to withhold any further investment in Private Sector Companies Bonds and to compulsorily consider one of the two required ratings necessarily from CRISIL, CARE, ICRA & India Ratings for investments in PSU Bonds category.

The Board ratified the decision of put option in NCDs of Tamil Nadu Power Finance Corporation and also approved put option in bond issued Kerala Finance Corporation & Tamil Nadu Power Finance and Infrastructure Dev. Corp. Ltd.

Shri Raghunathan, Employees' Representative on the Central Board, EPF appreciated the efforts of the Finance Investment & Audit Committee chaired by the Central Provident Fund Commissioner in finalizing the new Portfolio Managers for investing EPFO's corpus through a very transparent procedure. He further informed the Board that while SBI's Fund Management Arm has quoted 94% lesser than SBI PMS in the last mandate, UTI AMC has quoted 28% lesser. This would result in huge savings in portfolio management fees by EPFO.

PIB

CBT recommends 8.65% interest on EPF to its subscribers for the year 2016- 17

Press Information Bureau
Government of India
Ministry of Labour & Employment

19-December-2016 16:54 IST

Shri Bandaru Dattatreya chaired the 215th meeting of the Central Board of Trustees (EPF)

CBT recommends 8.65% interest on EPF to its subscribers for the year 2016- 17

The Minister of State for Labour and Employment (Independent Charge) Shri Bandaru Dattatreya chaired the 215th meeting of the Central Board of Trustees (EPF) in Bengaluru today.

Following are the key decisions of the Board.

1. The Board adopted the 63rd Annual Report on the work and activities of the EPFO for the year 2015-16 for placing it before the Parliament.

2. Paragraph 60(1) of Employees’ Provident Funds Scheme 1952, requires EPFO to credit to the account of each member interest at such rate as determined by the Central Government in consultation with the Central Board. The interest is credited to the members account on monthly running balances basis with effect from the last day in each year. Interest rates are dependent on return on investments done following the pattern of investment prescribed by the Central Government from time to time under Para 52 of the Scheme.

To recommend the rate of interest for the year 2016-17, the status of estimated amount to the credit of the members as on 01.04.2016, budget estimates (BE) of the Contributions and Withdrawals during 2016-17 and the estimated income from the investment holdings are taken into consideration. Interest income from Provident Fund investments for the year 2016-17 has been estimated mainly on the basis of interest income received/receivable in the financial year 2016-17 including surplus from previous year of Rs 410 crore. It may be noted that the last year income included a surplus from previous year of Rs 1604 crore.

Taking into account relevant factors, the Central Board decided to recommend 8.65% interest to its subscribers for the year 2016-17. Roughly 17 crore subscribers’ accounts will be updated with this interest rate upon acceptance by the Government.

3. Enrolment and Establishment coverage campaign 2017

This special campaign will be run in the following manner:

For effective monitoring and implementation the Zonal Addl. CPFCs shall lead the campaign. District Offices of EPFO will be activated and sufficient number of officers will be exclusively engaged.
Meetings with the stakeholders namely Employer & Employee associations and State Governments will be held to make it a success. During the campaign wide publicity of PMRPY and PMPRPY benefits will also be undertaken. Online enrollment facilities to workers will form a key feature of the campaign.
Window will be provided from 01.01.2017 till 31.03.2017.

Following recommendation will be made for approval of the Government.

i. A nominal rate of levy of damages from the establishment for payment of contribution for the past period during the campaign for enrolment will be Rs one (Rs.1) per annum.

ii. Any employer during the campaign period, may send declaration for membership of the employees who were required or entitled to become members of the fund on or after the 1st day of April, 2009 but before the 1st day of January, 2017 who could not be enrolled for any reason.

iii. For the declaration made under this campaign, the employer shall be responsible to remit the contributions and interest payable in accordance with the provisions of the Act and the Schemes read with special provisions notified by the Central Government for enrolment campaign.

iv. No administrative charges will be leviable for the past period in respect of the employees enrolled during the campaign. The necessary amendments will be carried out under the relevant provisions of EPF & EDLI Scheme

v. The interest of workers enrolled under the campaign will be fully protected and they shall be eligible to get all eligible interest and benefits as laid down in the Schemes.

vi. To have uniform and nominal rate of levy of damages from the establishment for payment of contribution for the past period during the campaign for enrolment shall be fixed at Rs one (Rs.1) per annum. Enabling provision shall be inserted under para 32(a) of the EPF Scheme 1952 and under para (5) of Employees Pension Scheme, 1995 and para 8-A of EDLI Scheme, 1976.

This campaign will be suitably staffed and resourced so that employers who come forth to extend social security to their employees receive all possible assistance from EPFO. The action will meet the twin objectives of increasing the enrolment, extending social security benefits to all workers and reducing litigation.

4. The Board approved a set of guidelines for streamlining process of surrender of exemption granted to establishments. Surrender of exemption is a situation where an establishment requests to discontinue the exemption granted to it. As the Act and Scheme is silent regarding the procedure of surrender of exemption by an establishment, the decision assumes importance in helping ease of doing business.

5. The Supreme Court in SLP no.33032-33033 in the matter of R. C. Gupta & others has passed certain orders of credit of amounts in the EPF accounts to the previous accounts of employees in respect of wages more than the statutory wage limit. The orders are to the effect that if amounts exceeding statutory wage ceiling have been credited to EPFO, the classification thereon shall be at the joint option of employers and employees. In accordance, the Central Board approved a proposal for facilitating compliance. The 8.33% of the employer’s contribution proportionate to the salary of employees in excess of Rs.6500/- shall now be credited to the pension scheme along with the interest accrued in the provident fund account The employees however shall be required submit joint application along with their employer wherever the same has not been done. This will be applicable only in those case where the members/pensioners have contributed on higher wages than the statutory wage ceiling of Rs.6500/- with or without exercise of option prior to the issue of notification for increase of wage ceiling to Rs.15000/- effective from 01.09.2014.

6. The administration cost of the Employees’ Provident Fund (EPF) and Employees’ Deposit Linked Insurance Scheme (EDLI), 1976, is met from the administrative and inspection charges collected from the employers of un-exempted and exempted establishments. No charges however are levied to run Employees’ Pension Scheme (EPS), 1995.

The Central Government in consultation with the Central Board of Trustees, EPF fixes the administrative charges from time to time. The administrative charges were last reduced from 1.10% to 0.85% with effect from 1st January, 2015.Considering the need to promote the “Ease of Doing Business in India” and to make Indian business more competitive, and in response to the financial efficiency gained by EPFO, the Central Board decided to recommend further reduction of administrative charges to 0.65 %. It also recommended to abolish administrative charges levied in implementing the EDLI Scheme, 1976 passing on the benefits of efficiency and computerisation to employers. The Central Board also decided to constitute a sub-committee of CBT with members drawn from employees and employer representatives to make a pragmatic study of employment trends for next 10 years and recommend appropriate administrative charges to the Central Board.

7. The Chairman, CBT and the Minister of State for Labour and Employment (Independent charge) announced that Organisational Restructuring has been approved by the Union Government for implementation. This includes Cadre Restructuring which will ensure career progression of 20,000 staff/officers of EPFO. The Minister announced that this will be implemented as a New Year gift.

7th Pay Commission – Finmin’s Blink on EPF Gives Confidence to Unions & Employees

7th Pay Commission – Finmin’s Blink on EPF Gives Confidence to Unions & Employees

7th Pay Commission – Finmin’s Blink on EPF Gives Confidence to Unions & Employees – Labour movement of the garment workers of Karnataka state is an eye-opener for all.

The flip-flops by Union government on the revised EPF withdrawal norms may embolden government employees to strike work on July 11 as a means to get higher wages and allowances under 7th Pay Commission.

First, under the public outlash, the government withdrew the budgetary proposal to make 40 percent of the EPF corpus taxable. Now, under the protest of garment factory workers in the Bangluru area, central government again withdrew its February 10 notification which prevented an employee from withdrawing 100 percent of the EPF corpus before the age of 58 years.

In a third flip-flop, the government has decided to reverse its earlier decision of reducing the interest rate on Employees’ Provident Fund deposits for 2015-16 and instead keep it at 8.8 per cent, in line with the stand of the Central Board of Trustees (CBT) of the EPF Organisation (EPFO).

The flip-flops by the Govt on the revised EPF withdrawal norms has emboldened the government employees for nationwide protests against 7th pay commission recommendations.

“The labour movement of the garment workers of Karnataka state is an eye-opener for all the other working class in the entire country,”said PS Prasad, Secretary General, Confederation of Central Government Employees and Workers Karnataka State.
“If the Central Government employees also participate in trade union action against the retrograde recommendations of the 7th Pay Commission similar to the Garment Workers of Karnataka, we too can get similar results and hope for a better wage revision and a decent wage hike”, Prasad was further quoted as saying.

Source: http://www.gconnect.in

Unions to protest lowering provident fund interest rate on Apr 29

Unions to protest lowering provident fund interest rate on Apr 29

Trade unions today gave call for day-long nationwide protest on Friday against Finance Ministry’s decision to fix 8.7 per cent interest rate for provident fund subscribers, lower than 8.8 per cent decided by the EPFO.

“While condemning such arrogant anti-worker approach of the government, the central trade unions call upon the workers and the trade unions irrespective of affiliations to protest against the same by holding demonstrations, meeting, etc on April 29, 2016, throughout the country,” ten central trade unions said in a joint statement today.

The unions include Indian National Trade Union Congress, All India Trade Union Congress, Centre of Indian Trade Unions and All India United Trade Union Centre.

However, RSS-backed Bharatiya Mazdoor Sangh (BMS) has opted out of the proposed stir.
When contacted, BMS General Secretary Virjesh Upadyay said, “BMS will hold a nationwide protest tomorrow.”

The unions strongly denounce the “unilateral reduction” in interest rate on Employees Provident Fund (EPF) from 8.8 per cent to 8.7 per cent, ignoring the unanimous decision of tripartite Central Board of Trustees (CBT) of EPFO, the statement added.

CBT, which is headed by the Labour Minister, is the apex decision making body of the Employees Provident Fund Organisation (EPFO).

“On February 16, 2016, the CBT of EPFO, in its meeting chaired by Labour Minister (Bandaru Dattatreya) unanimously decided the interest rate on EPF at 8.8 per cent as an interim measure with an indication of increasing it further in view of availability of funds generated by EPF,” it said.

But the Finance Ministry, imposed its decision to reduce the interest rate further to 8.7 per cent without even consulting the CBT, it added.

Yesterday, Dattatreya told Lok Sabha: “The CBT, at its meeting held in February 2016, had proposed an interim rate of interest at 8.8 per cent to be credited to the accounts of EPF subscribers for 2015-16. The Finance Ministry has, however, ratified an interest rate of 8.7 per cent.”

The interest rate for 2013-14 and 2014-15 was fixed at 8.75 per cent.

It is probably for the first time that Finance Ministry has overruled the decision of the Central Board of Trustees (CBT) on the interest rate.

PTI

EPFO settles 104.38 lakh claims in the current fiscal CBT, EPF recommended 8.8% rate of interest for the year 2015-16

EPFO settles 104.38 lakh claims in the current fiscal CBT, EPF recommended 8.8% rate of interest for the year 2015-16

Simplified Pension Claim Form 10D (UAN) and single page Pension Payment Order (PPO) under Employees’ Pension Scheme, 1995 unveiled

New Delhi: While taking stock of the performance of EPFO in the month of February 2016, Dr V.P. Joy, the newly appointed Central P.F. Commissioner, noted that for the period April 2015 to February 2016, EPFO settled 104.38 lakh claims. Out of these 40% were settled within 3 days and 78% within 10 days. 96% of the claims were settled within the stipulated 20 day period.

During the month, 211th meeting of the Central Board of Trustees, EPF was held at Chennai. The Board deliberated on the rate of interest for the financial year 2015-16 and recommended 8.80% interest on the PF balances in members’ accounts. Last year, the rate of interest was 8.75%.

A Simplified Pension Claim Form 10D (UAN) and single page Pension Payment Order (PPO) under the Employees’ Pension Scheme, 1995 was also unveiled by the Union Labour & Employment Minister (Independent charge) at the conclusion of the Board meeting. The single page PPO format is simple and more comprehensible to members / pensioners. This attempt is towards the rationalization and simplification of forms in line with the initiatives of the Government. At present, the simplified 10D-UAN claim form is meant to be used only by a member who has an activated Universal Account Number. Other pre-requisites are filing of details in Form 11(New), Aadhaar Number and Bank Account details in the UAN portal. The nominations with Aadhaar numbers should also be available in the UAN portal. Through this Form, service to a member can be done directly without any requirement of attestation by the employer. Both the simplified PPO format and claim form will be implemented from 01.04.2016.

In order to boost the process of seeding the Universal Account Number (UAN) with KYC (eg. PAN, bank account details, Aadhar) that enables enhanced services from EPFO, an “Incentive Scheme” has been launched for the employers. Under this scheme a claim refund of upto 10% of administrative charges payable to EPFO can be claimed upon completing specified tasks (furnishing member information and digitally authenticated KYC details). The Scheme shall be in operation for one year, beginning 1st January 2016 to 31st December, 2016.

The age of superannuation in EPF Scheme, 1952 was also revised from erstwhile 55 years to 58 years to align it with the age of superannuation in Pension Scheme (EPS 1995).

The month of February 2016 saw EPFO redressing more than 20,000 grievances leaving only 3,083 grievances pending. This translates into 82% of these grievances remaining pending for less than 7 days.

PIB

EPFO Likely to Announce Interest on PF for 2015-16 on Nov 24

EPFO Likely to Announce Interest on PF for 2015-16 on Nov 24

After RBI cut interest rate by half a percentage point in September end, finance ministry had said that it will review rate of interest on small savings scheme.

Retirement body EPFO is likely to announce interest rate on PF deposit for 2015-16 at its trustees’ meeting on November 24.

“The proposal for fixing rate of interest on PF deposits for 2015-16 is likely be discussed and approved in the 209th meeting of EPFO’s Central Board of Trustees (CBT) on November 24, 2015,” a source said.
The Employees’ Provident Fund Organisation (EPFO) had provided 8.75 per cent interest on PF deposits for 2013-14 and 2014-15.

Speculation are rife that interest rate on savings schemes can come down in view of interest rate cuts by the Reserve Bank of India earlier this year.

Lowering of interest on rates on savings scheme will help government to nudge banks to bring down lending rates.

After RBI cut interest rate by half a percentage point in September end, finance ministry had said that it will review rate of interest on small savings scheme.

These schemes include Post Office Monthly Income Scheme (MIS), Public Provident Fund (PPF), Post Office Time Deposit Scheme, Senior Citizen’s Savings Scheme, Post Office Savings Account, and Sukanya Samriddhi Accounts.

“It has also been decided that the government will undertake a review of small saving interest rate also,” Economic Affairs Secretary Shaktikanta Das had said.

However, fixing the interest on EPF solely depends on the EPFO’s apex decision making body CBT headed by the Labour Minister as the body provides rate of return from its own income.

Once the rate of interest is decided and announced by the CBT, it is sent to the Finance Ministry for concurrence. The latter approves the proposal if EPFO has sufficient income to provides the proposed rate of interest on PF from its income during the year without any shortfall.

After the approval of Finance Ministry, the rate of interest is notified and credited to the accounts of over five crore subscribers of the body.

Apart from rates of interest, the CBT may also take up two separate proposals to allow its subscribers to pledge their future PF contribution to buy low cost houses and to reduce administrative charges from 0.85 per cent to 0.65 per cent of basic wages.

These two proposal for housing and reduction of administrative charges paid by employers were on agenda for discussion in last meeting of CBT held on September 16.

EPFO had reduced the administrative charges from 1.10 per cent of basic wages to 0.85 per cent in March this year. The further reduction to 0.65 per cent will help companies save around Rs 2,000 crore annually.

Source: The Economic Times