EPFO to use IT-based monitoring of private provident fund trusts
Tightening the noose around private PF trusts, retirement fund body EPFO has decided to use IT-driven monitoring mechanism to ensure improved compliance of EPF scheme by them.
“It is proposed to take measures to effect an IT-driven monitoring mechanism for the exempted establishment,” an Employees’ Provident Fund Organisation’s (EPFO) order for the field staff said.
These private provident fund trust or exempted establishment are formed by firms which manage their employees’ EPF accounts and funds.
The subscribers of these trusts and employers managing those also enjoy income tax benefits at par with the EPFO subscribers and firms maintaining their PF accounts with regional officers of the body.
According to the order, the annual report for the year 2011-2012, the total number of such exempted establishments or PPFT is 2,750 whereas, as per establishment master (other records) of regional officers, there are 4,417 such trusts.
EPFO has asked its field staff to ensure whether the exempted trusts or establishments or PPFTs have submitting the prescribed returns.
The field staff has been asked to find out and ensure that all the eligible employees are enrolled under the Board of Trustees (BOT) of the PPFTs and their PF contributions are paid in time.
It has also directed them to ensure that BOT invest PF amounts in accordance with that investment pattern and within the stipulated time frame.
The regional offices have also been directed to ensure that contributions are being paid at the rate of 12 per cent (of basic pay and dearness allowance) over the years.
Employers as well as employees are required to contribute 12 of the basic pay and dearness allowance towards the provident fund accounts every month.
It has been asked by the head office to find out and ensure that whether the interest rate (on the PF deposits) at the prescribed rates or above have been declared by the respective BOT over the years.
Under the scheme, the PPFTs have to maintain the rate of interest on PF deposits announced by the FPFO for a fiscal year. They cannot lower than the prescribed rate. However they can pay more than what EPFO prescribes.
EPFO headquarter also asked the field staff to provide it a comparative statement of employment strength, enrollments, the quantum of PF contributions paid to the BOT (under EPF) as well EPF office (under Employees Pension Scheme) over the last 3 years in order to find out whether there is any perceptible fall in either enrollment and PF contribution by these PPFT.
EPFO want the regional offices to complete this exercise in order to have online compilation of exempted status and related information about such trusts.