EPFO surprise for subscribers: See how you can be affected
The EPFO on Thursday stated that it is neither legally liable nor financially capable to pay benefit in respect of persons from whom the corresponding “monthly remittances” have not been received. FE reported on Wednesday that organisation (EPFO) would suffer from unsustainable pension payouts if it failed to resist subscribers’ attempts to inflate their pension entitlements following a 2016 order of the Supreme Court. In a status note circulated to the Central Board of Trustees (CBT) members, which held its meeting here on Thursday, the EPFO said that the 2016 Supreme Court order on the pension issue was specific for the category of Provident Fund (PF) members who had already exercised the joint option both from the employer and employees for contribution on actual salary of the EPF scheme but was not given the option to contribution to pension on actual salary under the EPS scheme.
“EPFO does not differentiate between the employees of the un-exempted and exempted establishment under Provident Fund, with regard to the benefits under EPS,1995. However, EPFO has to distinguish between those EPS members who have paid monthly contribution on actual/higher salary to EPFO vis-à-vis those who have paid contribution limited to the ceiling amount or lower amount,” it said in the note.
The EPFO said directions have already been issued to extend the benefits in compliance to Supreme Court order to all members of Employees Pension Scheme, 1995, whose contributions on actual/higher salary including PF and pension was received in EPFO account, but at the same time, there would be no higher pension entitlement for those from whom the contribution on higher salary has not been received by EPFO. “The settlement on higher wages leads to higher financial outflow than inflow leading to substantial deficit in the pension account. As such pension account will be unsustainable in case liabilities are undertaken without corresponding receipts,” the retirement fund said.
The facility for granting revised pension is to be made by adjusting the requisite amount of contribution from PF account of EPFO to its the pension account. As some cases have been filed by such “non-eligible category of employees” in the various high courts for extending the facilities of pension on actual salary exceeding statutory limit to them also, petition for transferring all such cases have been filed in the Supreme Court and the matter is sub-judice. “Under the circumstances, any further action in this regard can be taken after the outcome of the decision of the SC in the petitions filed,” it said.
EPFO clears proposal to credit ETF units to PF A/Cs
EPFO on Thursday approved a proposal for crediting exchange traded fund (ETF) units to provident fund accounts of its 4.5 crore members. The subscribers would be able to see ETF units in their PF accounts by March-end next year. EPFO’s apex decisionmaking body Central Board of Trustee has approved an accounting policy for valuation and accounting of equity investments which was prepared in consultancy with IIM Bangalore, labour minister Santosh Gangwar told reporters after trustees’ meet.