The move to shift unclaimed Employees' Provident Fund (EPF) deposits to the Senior Citizens' Welfare Scheme has once again pitted the government against the trade unions on the issue of people's retirement funds with the Employees' Provident Fund Organisation (EPFO).
The move to shift unclaimed Employees’ Provident Fund (EPF) deposits to the Senior Citizens’ Welfare Scheme has once again pitted the government against the trade unions on the issue of people’s retirement funds with the Employees’ Provident Fund Organisation (EPFO).
This is the fourth such instance since the Union budget where the unions have strongly opposed government moves on EPF money. The earlier controversial moves include the budget proposal to tax EPF money, followed by EPFO’s move to impose fresh restrictions on premature withdrawal of provident money and then the lowering of interest rate on EPF balances.
All three moves, which had resulted in public ire, had to be subsequently withdrawn by the government. In fact, following three successive roll-backs in quick succession, Finance Minister, Arun Jaitley, in an interview had said that he would not tinker with people’s retirement money though he maintained that the moves were ‘well-intentioned’.
However, the government’s budget proposal to shift unclaimed small savings deposits (including unclaimed EPF funds) seems to have created another flashpoint. Funds are termed ‘unclaimed’ if no one comes to withdraw them 7 years after they fall due.
Trade unions, who represent employees’ interest, have a valid point. They have argued that the money lying in a person’s account is akin to property in his or her name which can be claimed by any legal heir at any point of time and that taking it away and putting it for another purpose would not be legally tenable. In fact, they have threatened to take the matter to the court if this decision on EPF is also not rolled back.
It was a wise decision on the part of the Labour Minister, Bandaru Dattatreya to buy time by agreeing to withdraw the item from the agenda of the Central Board of Trustees (CBT) meeting on Tuesday. The labour mininster also assured central trade union representatives that their views on the matter would be discussed with Prime Minister, Narendra Modi and Finance Minister, Arun Jaitley.
The creation of Senior Citizen’s Welfare Fund is a welcome step and the move to put unutilised money lying in other funds for the cause is also a laudable step. Hence, a way out of the impasse could be to incorporate legally valid clauses to assure every stakeholder that should any vaild claim comes up from the provident fund subscribers or their heirs or nominee at any point after the money is transferred to the new fund, the entire dues along with interest accumulated would be paid out.