Recovery of Provident Fund under EPF Scheme, 1952 – Reg

KENDRIYA VIDYALAYA SANGATHAN

18- INSTITUTIONAL AREA, SHAHEED JEET SINGH MARG,

New Delhi – 110016

Email ID:- kvsjcfin@gmail.com

Telephone No: 011-26858570 ext-(205)

F.No.1-1/2015/KVS/JC(Fin)

Dated: 16/06/2016

The Deputy Commissioner /Director,

Kendriya Vidyalaya Sangathan,

All Regional Offices/ ZIETs.

Sir/Madam,

Sub: Recovery of Provident Fund under EPF Scheme, 1952 – Reg.

With reference to the captioned subject, I am to forward herewith a copy of DO. Letter no.CAIU/011(33)2015/HQ dated 6th June 2016 which is self – explanatory.

The salient features highlighted by Sri. C.Chakraborty, Addl. Central Fund Commissioner-II, EPFO, New Delhi in his letter is reproduced hereunder:

1. The issue of coverage of contract workers under the EPF & MP Act, 1952 has been flagged as an area of top most concern by the Government of India.

2. Contractors claim huge amount towards EPF of contract workers from the Principal Employer (KVS) but either do not deposit it at all or deposit it partly, thus depriving these workers of Provident Fund, Pension and Insurance benefits.

3. As per Paragraph 30(3) of EPF Scheme, 1952, it is the responsibility of the principal employer to pay both the contributions payable by him in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.

4. In their website www.epfindia.gov.in on the “establishment search option”, a provision is available to verify as to whether the agencies and contractors having Provident Fund Code numbers are regularly depositing Provident Fund contributions every month to check the compliance position of the agencies and contractors to the provisions of the Act and the Schemes framed there under to which the contracts are awarded by the department.

5. To bridge the gaps and with the view to make the system more robust, transparent and to reduce the cost of compliance for the employer, EPFO has launched a facility for the principal employers to register at the EPFO website the details of contract employers of each contract awarded, which can be viewed and updated at any time.

6. The Regional and Sub-Regional office will also take steps to secure compliance of employees engaged by the contactor towards Employees Provident Fund.

7. A representative can be deputed to contact the concerned Regional PF Commissioner of the Regional/Sub-Regional Office to know further methodology.

8. The details of the contract employers of each contract should be uploaded to facilitate compliance under EPF and MP Act, 1952.

It is requested that the contents of DO letter dated 6th June 2016 may be brought to the notice of all the Principals under your region and may also be noted at your end for compliance in letter and spirit.

Yours faithfully,

Sd/-

(M. Arumugam)

Joint Commissioner (Fin)

Source:http://kvsangathan.nic.in/GeneralDocuments/ann-17-06-16.pdf

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New EPF Rules to Come into Force after April 30

New EPF Rules to Come into Force after April 30

On Feb 10, 2016, the ministry of labour and employment made sweeping changes in the EPF rules restricting the withdrawal of EPF corpus. EPFO rules restricting withdrawal of employees’ provident fund will come into force after April 30.

New EPF Rules to Come into Force after April 30 – The government has deferred the implementation of the new rule till April 30, 2016.

EPFO rules restricting withdrawal of employees’ provident fund will come into force after April 30. This means that in case you are unemployed for 2 months or more and want to withdraw your full EPF you can do so only within the next 15 days. After that the withdrawal amount will be restricted and you will be able to get the full amount only when you turn 58.

On Feb 10, 2016, the ministry of labour and employment made sweeping changes in the EPF rules restricting the withdrawal of EPF corpus.

Hitherto, a member of EPFO could withdraw 100% of the accumulated corpus if unemployed for a period of 2 months or more. The accumulated corpus is a sum of employer’s contribution, employee’s contribution and the interest earned on them. Of course, the person needs to have accumulated some EPF in a previous employment to have a corpus to withdraw at all.

However, the new EPF rules have restricted the amount of withdrawal that a member can make. Under the new rule, a member after being unemployed for 2 months or more can withdraw only his own contribution and the interest earned on it. He can’t withdraw the corpus generated from the employer’s contribution along with the interest earned on it. A member in the Employees Provident Fund Organisation (EPFO) can withdraw the full Employee Provident Fund (EPF) corpus only after attaining the age of 58 years. So, if you are jobless for 2 months or more and wish to withdraw the full EPF corpus, you just have 15 days to get it out.

The government has deferred the implementation of the new rule till April 30, 2016. From May 1, till 58 years of age you can withdraw only your own contribution in EPF which equals 12% of your basic salary plus the interest if unemployed for 2 months or more. The employer’s contribution plus the interest accumulated will be withdrawable only once you attain the age of 58 years.

We consider a hypothetical scenario wherein a person after being employed for 20 years becomes jobless in the month of Jan, 2016. Assuming his basic salary as Rs 25000 per month for the whole period his own contribution in EPF would be Rs 3000 per month. If he contributes for 20 years, his own contribution of Rs 7.20 lakh (12%*25000*12*20) will yield him a corpus of ?approximately Rs 19 lakh which includes the interest on his contribution.

What’s more, the employer’s contribution of Rs 4.20 lakh will grow to Rs 11.50 lakh approximately which includes the interest component too. In this case, we have assumed an interest rate of 9% per annum compounded yearly for the whole period. As he became jobless in Jan, he is unemployed for a period of more than 2 months as on date.

Under the current rule, if he withdraws his EPF corpus before May 1, then he can withdraw the full corpus of Rs 30.5 lakh. However, if he doesn’t withdraw before May 1, he can take out his own contribution and interest of Rs 19 lakh even after this date provided he remains jobless. However, the remaining Rs 11.50 lakh can be withdrawn only after he reaches the age of 58 years. You can however, withdraw 90% of the employer’s contribution plus interest at the age of 57 years. Importantly, the erstwhile rule of zero interest on inoperative accounts was quashed from April 1. Hence the employer’s contribution lying idle in the EPF account till the age of 58 years will continue to earn interest.

Source: Economic Times

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Is NPS better than EPF?

Is NPS better than EPF?

The NPS is more complicated than EPF, but it may ensure a sufficient retirement kitty

If there’s one investment option that has received generous tax breaks in the Budget, it is the National Pension System (NPS). In a watershed move, the Finance Minister has also announced that employees in the organised sector will now be able to opt out of contributions to the Employees Provident Fund (EPF) and invest in the NPS instead. So, if given this choice, what should you do? Here’s how they compare.

Contributions

EPF contributions are mandatory for employees earning up to ?15,000 a month in the organized sector. Many employers however insist on EPF contributions for all their employees. The contribution is pegged at 12 per cent of your pay (basic plus dearness allowance). Your statutory EPF contributions are matched by your employer. If you are an employee who usually struggles to save, the EPF is a good option for you as it forces you to save at least 12 per cent of your pay.

But if you are targeting a comfortable retirement, note that EPF alone won’t be enough as it is pegged only to your basic pay. The NPS is a voluntary account; you can contribute anything starting from ?500 a month (?6,000 a year).

To avail of the tax breaks on the investment, the maximum limit is ?2 lakh a year. Unlike the EPF, the NPS allows you to skip contributions for a few months if you can’t afford it (investing once a year is mandatory).

So, the NPS scores over the EPF on two counts — you can save much more and do it with greater flexibility. But currently all your EPF contributions are matched by your employer. Not so for the NPS.

Portfolio

The money you pay into EPF is invested in ultra-safe options — Central and State Government securities, bonds and deposits from PSUs and a special deposit scheme from the Government. Last we know, G-Secs made up 40 per cent of the portfolio, PSU debt 32 per cent, with the deposit making up the rest of the EPF kitty. The EPF doesn’t actively manage its portfolio — it mostly buys and holds till maturity. This makes for low but predictable returns.

The key differentiator with the NPS is that it allows you to add an equity component to your retirement kitty. You also get to flexibly allocate your money between equities (up to 50 per cent), liquid funds/bonds and Government Securities (G-Sec) in any proportion you like.

You also have the choice of deciding who, among the six pension fund managers, will manage your money. Their individual track records are available on their websites.

You can rejig allocations once a year and also change your fund manager. Both the equity and the debt portions of the NPS have delivered double-digit returns in the last one year. But because they are invested in market instruments, your returns will fluctuate from year to year.

The G-Sec portion, for instance, delivered negative returns during the rising rate scenario, but is faring well with falling rates. Given that you are looking at the NPS as a long-term option, you need not worry too much about shorter term losses in the debt portfolio. Due to its portfolio structure, the NPS is likely to earn higher returns but with greater variability.

Returns

The interest you earn on your EPF account is decided by the EPF trustees who announce the rate every year. In the last four years, interest rates have been 9.5, 8.25, 8.5 and 8.75 per cent, respectively.

The returns on NPS depend on your asset allocation as well as choice of fund manager. If you choose a 30-50 per cent equity component, returns are likely to be in the double-digits, even assuming equities manage only 15 per cent a year and debt securities 8 per cent.

Disclosures

The EPF’s portfolio is not made public. But it is a government-backed scheme and the presumption is that it will not default on any payments. Returns are also announced and well-publicised.

With the NPS, you know exactly where it invests, with all the managers regularly disclosing their portfolios. But unlike the EPF, gauging NPS returns is not easy. Returns earned by different plans/managers are not available at one location. You need to compile them individually from the historical NAVs put out by the different fund managers.

So, the EPS is your best bet if you like to know exactly what you’re earning. The NPS works if you don’t mind leaving it to market forces.

Liquidity

The EPF allows you to withdraw your money before retirement if you resign from one job and take up another, after a gap. You can also draw money from it for constructing/buying a home, illness, marriage or education of children. You can use the sums withdrawn for these purposes.

In the NPS, if you withdraw before the age of 60, you need to compulsorily use 80 per cent of the proceeds to buy an annuity plan from an insurer. Even withdrawals after the age of 60 require you to use 40 per cent to buy an annuity. Only 60 per cent will be available to you to deploy as you please.

The EPF is certainly more flexible than NPS on early withdrawals. But withdrawing too much or too often can leave you short of a retirement kitty when you most need it.

Taxability

Contributions to the EPF are tax-free under Section 80C. Interest earned and withdrawals aren’t taxed either, unless you do so within five years of starting the account.

Investments in the NPS, up to ?2 lakh are tax-free. But the sums you withdraw at retirement are taxable at the prevailing income tax rates.

Source:www.thehindubusinessline.com

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Interest Rate on EPF

Press Information Bureau 

Government of India

Ministry of Labour & Employment 

Interest Rate on EPF 

The Minister of State for Mines, Steel and Labour and Employment, Shri Vishnu Deo Sai has said that the government has declared 8.75% interest on Employees’ Provident Fund (EPF) for the year 2013-14. 

In a written reply in the Lok Sabha today, Shri Vishnu Deo Sai has said that return on EPFO fund cannot be compared with return on other Pension Schemes like New Pension Scheme (NPS). The declaration of the return on NPS is on the basis of the accounting policy prescribed by NPS which allows the Net Assets Value (NAV) to be declared on the basis of current market value of the investments, while EPFO follows the cost value of the investment for accounting its investment and return is declared on the basis of actual receipt of interest on the investments. The return on EPFO investments is fixed whereas the return on NPS is not fixed and fluctuates on daily basis depending on the prevailing market conditions. 

The Minister said that presently the funds of EPFO are invested as per the pattern of investment notified by the Government in November, 2013 wherein only investments in corporate debt and Government bonds are allowed. There is no provision for investments in equities. 

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Employees earning upto Rs 15,000 a month will soon come under the Employees’ Provident Fund (EPF)

Employees earning upto Rs 15,000 a month will soon come under the Employees’ Provident Fund (EPF) net, with the Narendra Modi government approving a hike in the threshold for mandatory PF savings from Rs 6,500 a month to Rs 15,000.

Though the Manmohan Singh government had approved the hike in the EPF threshold this February after years of deliberations, the change couldn’t be notified before the election code of conduct kicked in.

Another UPA decision to assure a minimum monthly pension of Rs 1,000 for members of the employees’ pension scheme run by EPFO, in its final weeks in office, was also not notified before the polls.

Ministry officials had sought a fresh approval on the salary ceiling hike from the new minister for labour and employment Narendra Singh Tomar.

“The minister has approved the higher salary ceiling for mandatory EPF savings, and we will issue a notification soon for it to become effective,” said a senior government official aware of the development.

The ministry is also learnt to be examining if the minimum Rs 1,000 pension promise is sustainable.

The finance ministry, which had approved the pension promise with great reluctance and several conditionalities, had only provided funds to finance the bonanza for 2014-15.

At a board meeting in February, officials had warned that the pension assurance may have to be rolled back next year as there was no funding support beyond the first year. But their concerns were over-ruled by the previous labour minister Oscar Fernandes, who was the board’s chairman.

The Employees’ Provident Fund Organisation or EPFO oversees the retirement savings of over 8 crore members at present and the number could go up sharply as those earning between Rs 6,500 and Rs 15,000 will come under its fold once the new rules are notified and implemented.

The EPFO’s present ceiling for statutory contributions is a mere Rs 6,500 per month – lower than the minimum wage prescribed across the country.

Twenty-four percent of an employee’s salary (up to the ceiling) is mandatorily deducted and parked with the PF office.

Source:http://articles.economictimes.indiatimes.com/2014-06-12/news/50536576_1_minimum-monthly-pension-provident-fund-organisation-epf

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Good news for Provident Fund A/c holders, Interest Rate on PF Deposits Raised to 8.75% for 2013-14

Retirement fund body EPFO Monday announced a hike in interest rate on Provident Fund deposits to 8.75 per cent for 2013-14, a decision that will benefit over 5 crore subscribers.

The interest rate on PF deposits in the previous financial year was from 8.5 per cent.

The decision to raise interest rate was taken by the Central Board of Trustees (CBT), the apex decision making body of the Employees' Provident Fund Organisaton (EPFO).

"We have decided to recommend to the government 8.75 per cent rate of interest for 2013-14 to its subscribers," Labour Minister Oscar Fernandes, who chaired the CBT meeting, told reporters here.

The EPFO's recommendations would now be vetted by the Finance Ministry. Once the ministry gives its concurrence to the decision, the interest would be credited into the accounts of subscribers.

Elaborating on the decision to raise PF rate, EPFO's Central Provident Fund Commission K K Jalan said: "We have estimated an income of Rs 25,048.55 crore for 2013-14. EPFO would require 25,005.41 crore for providing 8.75 pre cent rate of interest for this fiscal and leave a surplus of Rs 43.14 crore." 

EPFO also announced a 20 per cent increase on Employees' Deposit Linked Insurance Scheme, 1976 as an interim measure.

Under this scheme, the family of a worker can get a maximum sum assured of Rs 1,30,000 in case of his/her demise during the service period. After 20 per cent raise, the maximum amount would now be Rs 1,56,000.

CBT has also approved increasing minimum administrative charges for managing EPF Scheme, 1952 and EDLI Scheme to Rs 500 and Rs 200 per month from existing rate of Rs 5 and Rs 2, respectively.

These charges for non-functional firms having no contributory members is also increased to Rs 75 and Rs 25 per month respectively for the two schemes.

EPFO has a corpus of around Rs five lakh crore. 

When asked about EPFO's plans to improve investments, particularly Special Depositor Scheme (SDS) which earns just 8 per cent rate of return, Jalan said: "We will definitely take out money from SDS and invest in high yielding instruments. We will soon work on a proposal." 

On the Labour Minister's idea of deducing extra 10 per cent on basic wages by EPFO for providing housing to workers, the Central Provident Fund Commissioner said: "We will definitely work on the proposal. He has a lot experience." 

The CBT also initiated the process for selection of new multiple fund managers and constituted a committee to appoint a consultant for the purpose. At present, Crisil is providing consultancy services to the EPFO.

The trustees also asked the Finance, Investment and Audit Committee to look into the proposal which sought more freedom for EPFO to trade and exit investments besides allowing it to refrain from investing in bonds of states.

The board also reviewed the performance of its four fund managers since August, 2011. State Bank of India remained on the top by earning a return of 9.23 per cent on investments, followed by followed by Reliance Capital Asset Management at 9.19 per cent.

The other two fund managers, HSBC AML and ICICI Sec PD Ltd, earned 9.18 per cent each which was above the benchmark rate of 9.11 per cent.

EPFO also launched the electronic return facility for exempted establishments (private PF trusts). It will benefit over 3,000 exempted establishments which are now required to file their monthly and annual paper returns.

These establishments which are otherwise managing the provident fund trust on their own will now get the facility of electronically reporting about their work. This electronic return will replace the earlier monthly and annual paper returns filed by exempted establishments.

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Trade Unions to press for 9.5 per cent interest on PF deposits for FY'14

NEW DELHI: Trade unions will press for 9.5 per cent interest on PF deposits to over five crore subscribers for the current fiscal at next week's meeting of the trustees of retirement fund body EPFO. 

The Employees' Provident Fund Organisation's apex decision making body the Central Board of Trustees (CBT) will meet on Monday to discuss and approve the proposal regarding rate of return to be provided on PF deposits in 2013-14. 

"We will demand for 9.5 per cent rate of interest for subscribers for the current fiscal, higher than 8.5 per cent provided for 2012-13," All India Trade Union Secretary and a CBT member D L Sachdev told PTI. 

He said: "This rate of 8.5 per cent is less than the interest provided by banks these days, and would not be able to cover inflation." 

Retail inflation for industrial workers in November was 11.47 per cent. This is the rate of inflation which is used by central government for computing hike in Dearness Allowance. 

According to EPFO estimates in its proposal for the trustees, payment of 8.5 per cent rate of interest on PF deposit for this fiscal would leave a small surplus of Rs 56.96 crore. 

The EPFO, which is estimated to have an income of Rs 20,796.96 crore in the current fiscal, needs Rs 20,740 crore to pay 8.5 per cent interest to its subscribers, as per the agenda listed for the CBT meeting. 

As per the estimates, hiking the interest payment by half a per cent to 9 per cent would require an additional amount of Rs 1,220 crore, which does not seem feasible. 

However, another EPFO trustee and All India Secretary Bhartiya Mazdoor Sangh Virjesh Upadhyay said: "The interest rate for this fiscal could be higher than 8.5 per cent provided in 2012-13. 

"We have certain suggestions. We will put those before the CBT. If we reduce certain administrative expenses and improve efficiency then payment of interest rate higher than 8.5 per cent will be possible." 

Upadhyay said that he would also demand 9.5 per cent interest on PF deposits for 2013-14. 

Source:http://articles.economictimes.indiatimes.com/2014-01-07/news/45955397_1_epfo-trustee-pf-deposits-over-five-crore-subscribers

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EPFO Makes Further Progress MORE than 10 Lakh Claims Settled by EPFO in October, 2013 EPFO Stresses on Complaint Resolution.

               The Employees’ Provident Fund Organisation (EPFO) settled 10,21,922 claims during the month of October, 2013.  This number is 28% higher than the claims settled in the month of September, 2013. 72% of these claims were settled within 10 days while remaining 28% were settled within 30 days.  EPFO’s efforts in grievance redressal has paid dividends.  Number of complaints in Central Public Grievances Redressal System (CPGRAM) has come down to less than 100.  No. of grievances in Employees Provident Fund internet Grievance System (EPFiGMS) which has been activated lately have also got reduced from more than 25,000 to less than 5,500. Shri K.K. Jalan, Central Provident Fund Commissioner expressed his happiness over the fact that 108 offices out of 123 offices of EPFO do not have a single complaint pending for more than 30 days.
 
               These data were revealed during  a meeting convened today by the Central Provident Fund Commissioner (CPFC) Shri K.K.Jalan.  He also informed that the Employees’ Provident Fund Organisation got a receipt of 5,689 crores as remittances during the month of October, 2013 through 4.86 lakh establishments, which filed electronic challans cum return. He was also happy to note that a annual account updation software which was launched in September, 2013 has resulted into updation of 8.21 crores annual accounts till October, 2013.

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EPFO Rerformance in September 2013

   While reviewing the work of Employees Provident Fund Organisation during September 2013, it has been observed that the Organisation settled 7,96,759 claims in its 123 offices located throughout the country compared to 7,49,639 claims settled during September 2012. More than 50 % of the offices settled more than 80% of the claims within 10 days of receipt. Offices such as Ujjain, Gwalior, Udaipur, Jabalpur, Agra and Laxmi Nagar among many others are settling 80% of the claims within 3 days. The review meeting was taken by Shri K. K. Jalan, CPFC recently.

   In addition to the above, the Organisation responded to 16,586 grievances in the month of September. As a result, the number of total grievances has come to around 6,000. The earlier number was more than 25,000. It is also relevant that 101 of the 123 offices have no grievance pending for more than a month.

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Declaration of Productivity Linked Bonus (P.L.B.) for the year 2012-2013.

Employees' Provident Fund Organisation
(Ministry of Labour & Employment, Govt. Of India)

No. WSU/12(1)12012-13/PLB/13048

Date: 09 Oct 2013

All Regional P.F. Commissioners
In-charge of the ROs/SROs
Regional P.F. Commissioner-I(ASD), Head Office

Sub: Declaration of Productivity Linked Bonus (P.L.B.) for the year 2012-2013.

Sir,
   The Central Government, under Section 5D(7) of the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 has conveyed its approval to the extension of the existing Productivity Linked Bonus Scheme 1998-2004 (Revised) for the year 2012-2013 vide their letter No A-26022/1/1994-SS.1 dated 07th October 2013.

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Passbook for PF Account Holders.

Press Information Bureau
Government of India

   Passbook for PF Account Holders

   There are no dormant accounts in Employees’ Provident Fund Organisation (EPFO). However, as per provision of para 72(6) of the Employees’ Provident Funds (EPF) Scheme, 1952, a member’s account under certain condition is classified as Inoperative Account. All such Inoperative Accounts have a definite claimant.

   As per Para 73(1) of the EPF Scheme, 1952, a statement of account to each member through his last employer will be sent after the close of each year, showing opening balance, contribution during the year, interest credited, amount debited and closing balance of the year.

   Following initiatives have been taken by the EPFO to provide details to the PF account holders:-

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DA to EPF Pensioners.

   As per the statistics available upto  31.03.2012, the number of pensioners receiving pension less than Rs. 500/- p.m. is  around 12 lakh and those receiving more than Rs. 500  and less than Rs.1000/- is around 16.05 lakh.
 
   A number of representations have been received against meager pension and demanding increase in the pension. In order to address this issue, the Government of India constituted an Expert Committee for reviewing the Employees’ Pension Scheme, 1995 on 12.06.2009.  The recommendation of the Expert Committee was considered by Pension Implementation Committee (PIC), a sub-Committee of Central Board of Trustees (CBT), Employees’ Provident Fund (EPF), which inter-alia recommended that a minimum monthly pension under Employees’ Pension Scheme, 1995 be increased to Rs. 1000/- per month as an interim measure. The recommendation of the PIC was considered by CBT, EPF. However, the discussion remained inconclusive. A proposal for providing minimum pension of Rs. 1000/- under EPS, 1995 is under consideration of the Government.
            
   Central Government appoints Valuer under Para 32 of the Employees’ Pension Scheme, 1995 for annual valuation of Employees’ Pension Fund. Depending on the valuation report, the Central Government declared additional relief whenever Pension Fund permitted to do so. From 5th valuation of Employees’ Pension Fund as on 31.3.2001, the fund is showing continuous deficit, therefore, pension could not be revised by the Central Government.

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PF Cases Awaiting Settlement

   As on 13.12.2012 (for the period from 01.04.2012 to 13.12.2012), out of 107.16 Lakh claims received for settlement order, only 6.96 Lakh claims are pending for settlement.

   The obstacles faced in settlement of claims inter-alia include:

   (i) Incomplete claims (no bank account number,incomplete employee details, etc.)
   (ii) Incorrect claims (wrong account number, incorrect personal details, etc.)

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Nationalised Bank for EPF Deposit.

   Provident Fund contribution of private sector labourers covered under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 is deposited in the State Bank of India.

   As per the provision of Para 52(1) of the Employees` Provident Funds Scheme, 1952, all monies belonging to the Fund shall be deposited in the Reserve Bank of India or the State Bank of India or such other Scheduled Banks as may be approved by the Central Government from time to time. No other Scheduled Bank has been approved by the Central Government for this purpose.

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NPS performed better that GPF in the last year.

   The three NPS managers handling the pension funds of Central and state government employees have delivered average returns of 9.33% in the past one year, outperforming the state-run government provident fund (GPF), employees provident fund (EPF) and the public provident fund (PPF). The three-year annualised returns are also quite decent at 8.47%, though not as spectacular as in the past one year.

   More than 16 lakh central and state government employees have almost Rs 8,500 crore invested in the NPS. This money is managed by three pension fund managers - SBI Pension Funds, LIC Pension Fund and UTI Retirement Solutions. Each of the three funds manages roughly one-third of the NPS corpus.

   Though three years is a very short time to judge long-term instruments such as pension funds, the impressive performance is likely to silence the criticism that NPS is not allocating enough to growth assets. Central and state government NPS funds can invest a maximum of 15% in equities. Even in NPS for the general public, where investors can choose their own asset allocation, a maximum of 50% can be put in equities.

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Payment of EPF.

   Employees of a liquidated company can file their claim for provident fund, duly attested by any of the following authorized persons:

    Member of Parliament;

    Member of Legislative Assembly;

    Magistrate;

    A Gazetted Officer;

    Sarpanch of the Village;

    Manager of the Bank in which the Bank Account of the claimant is maintained; and

    Notary Public, etc.

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Reduction of Interest Rate on EPF.

   The Union Labour & Employment Minister Shri Mallikarjun Kharge has informed the Rajya Sabha that as per para 60(1) of the Employees’ Provident Funds Scheme, 1952, rate of interest on the Employees Provident Fund is determined by the Central Government in consultation with the Central Board of Trustees, Employees Provident Fund. Central Government declared 8.25% rate of interest on EPF accumulation for the year 2011-12 based on the earnings of the Fund during the year.

   Replying to a written question the Minister said however, requests from various Central Trade Unions have been received to maintain the existing rate of interest.

   There is no proposal under consideration to restore the Employees Provident Fund rate of interest at 9.5 percent for the year 2011-12.

   The interest rate on the Employees Provident Fund in a particular year depends on the earning of the Fund during that year. Based on the earning of the Fund during the year 2011-12, 8.25 percent rate of interest on the Employees Provident Fund has been approved by the Central Government.

Source: PIB

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EPFO may lower the interest rate on deposits to 8.6%.

   Retirement fund body EPFO may lower the interest rate on deposits to 8.6 per cent for over 4.7 crore subscribers for 2011-12 to match it with the rate of public provident fund (PPF) scheme. The Employees’ Provident Fund Organisation (EPFO) had provided 9.5 per cent interest rate to its subscribers for 2010-11 after it found Rs 1,731 crore surplus in its books of account.

   “The Labour Ministry will soon be sending a note to the Finance Ministry, recommending 8.6 per cent rate of interest on provident fund deposits to EPFO subscribers for this fiscal as provided under PPF scheme”, a source privy to the development said.

   The source said the ministry wants bring the EPFO’s rate of return on par with the PPF rate.

   According to the EPFO’s income projections, if the body provides 8.25 per cent interest for 2011-12, it would leave a deficit of a Rs 24 lakh. It had further pointed out that an 8.5 per cent rate of return would translate into a deficit of Rs 526.44 crore.

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Minimum monthly pension for members of EPF could soon increase to Rs 1,000

   The embattled UPA government is set to give a bonanza to 60 million workers in the organised sector. The minimum monthly pension for members of the Employees' Provident Fund (EPF) could soon increase to Rs 1,000.

   Currently, most EPF pensioners receive less than Rs 500 a month, but for some it is as low as 4 and 12. Union Labour Minister Mallikarjun Kharge has sought immediate measures to enable the first revision in workers' pension income in 11 years - an annual bonus was last doled out in 2000.

   Employers contribute 12% of workers' salaries to their EPF accounts, over two-thirds (8.33% of the salary) of which is diverted to a pension scheme, subject to a maximum of Rs 541 a month.

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Employees’ Provident Fund – 9.5% notified as rate of interest

   Employees’ Provident Fund : 9.5% notified as rate of interest under rule 6(b) of Part A of Fourth Schedule – NOTIFICATION NO. 24/2011 [F.NO. 142/14/2010-SO (TPL)], DATED 13-05-2011 Rule 6(b) of Part A of Fourth Schedule to Income-tax Act, 1961 – Recognised Provident Fund – 9.5 per cent rate notified under rule 6(b) of part A of IVth Schedule – Supersession of Notification No. S.O. 2091(E), dated 26-8-2010

   NOTIFICATION NO. 24/2011 [F.NO. 142/14/2010-SO (TPL)], DATED 13-5-2011

   In exercise of the powers conferred by clause (b) of rule 6 of Part A of the Fourth Schedule to the Income-tax Act, 1961 (43 of 1961), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) number S.O. 2091(E), dated the 26th August, 2010, the Central Government hereby fixes, with effect from the 1st day of September, 2010, 9.5 per cent., as the rate referred to in the said clause.

Source;taxguru

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