1. EPFO cracks down on closed exempted trusts, to transfer corpus to statutory fund

EPFO cracks down on closed exempted trusts, to transfer corpus to statutory fund

The Employees' Provident Fund Organisation (EPFO) has decided to transfer funds lying in exempted provident fund trusts, which have been closed or running without proper clearances, to be transferred to the statutory fund.

By: | Updated: September 6, 2016 12:54 PM

EPFO cracks down on closed exempted trusts, to transfer corpus to statutory fund

It has been witnessed that despite clear instructions, about Rs 477 crore was deposited in July through cheques, which constitute 4.98 per cent of the total Rs 9,576 crore received as PF dues from employers during the month. (PTI)

The Employees’ Provident Fund Organisation (EPFO) has decided to transfer funds lying in exempted provident fund trusts, which have been closed or running without proper clearances, to be transferred to the statutory fund. The statutory fund is run by the EPFO.

“In the interest of the workers and the public, it is desirable that accumulations of the members lying in such private Provident Fund Trusts which are closed is transferred to the statutory fund along with past accumulation statement,” recent communication from the EPFO to its field offices has said.

EPFO has directed its Regional Provident Fund Commissioners (RPFCs) of field offices to take stock of the situation in their respective jurisdiction and initiate suitable action if any such case comes to their notice. It has set a deadline of September 30, 2016, to prepare an action taken report in this regard and submit it to the headquarters with details in respect of each establishment.

Exempted funds are those that are given permission by the EPFO to run their own trusts. The funds are invested as per guidelines laid down by the EPFO.

The EPFO has said that these funds could be vulnerable to frauds and hence detrimental to public interest. “Funds lying with a private provident fund trust where the establishment which was granted exemption/relaxation but is lying closed since long and the Trust is running illegally cannot be said to be safe and in the interest of the employees. Neither it is the intention of the legislation behind grant of exemption to the establishments. Such Trust funds may be vulnerable to potential frauds,” the communication from KL Goyal, Additional Provident Fund Commissioner, said.

The move comes after the EPFO headquarters recently received a request from one of its field offices seeking approval for taking over of a Trust Fund of an exempted establishment reported to be lying closed for more than 14 years. The establishment was also reported to have undergone merger/acquisition in the past. The Trust had been running illegally through these years.

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