The Employees’ Provident Fund Organisation (EPFO) is planning to increase the inspection charges for exempted provident fund trusts to 0.28 per cent of the total pay on which contributions are made. At present, the inspection charge is 0.18 per cent for these exempted trusts.
Sources said the proposal has been mooted as part of the agenda of the meeting of the EPFO’s Central Board of Trustees (CBT) on October 31.
The fee is paid by both exempted and unexempted organisations to meet the expenditure in administering the Employees’ Provident Fund. Taking into account the resources of the Fund and meeting the expenditure for running the Scheme, the CBT, recommends the rate at which it would be levied.
Administrative charges for unexempted establishments are currently at 0.5 per cent and were last revised in 2018. In the case of exempt PF trusts, the inspection charge was last updated way back in 1998.
The increase in the administrative charges is unlikely to impact the contributions of members as these are borne by the employers, who will have to pay the higher amount, if the move goes through.
The higher charge is expected to help the EPFO meet the costs of implementing the higher pension under the Employees Pension Scheme. To validate the 1.74 million applications for higher pension, the EPFO is planning to increase the number of officers deployed in the Employees’ Pension Scheme and also create more posts at its headquarters as well as in field offices. The CBT, which is the EPFO’s apex decision making body, is scheduled to meet on October 31.
Exempted PF trusts are affiliated to the EPFO but are run and managed by companies on their own for their employees. At present, there are about 1,350 such trusts by companies such as Indian Oil Corporation, HDFC Bank, Tata Consultancy Services, Reliance Industries Ltd. According to the EPFO’s Annual Report 2021-22, there were 23.8 active member accounts from exempted PF trusts.
The lower inspection charge for exempted establishments, along with higher returns and ease of operations, are often seen as advantage due to which many companies prefer to have their own PF trusts.
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