Provident Fund: India
This is a collection of articles archived for the excellence of their content. |
Contents |
Employees' Provident Fund
EPFO to settle death claims within 7 days
EPFO to settle death claims within 7 days, Nov 02 2016 : The Times of India
Employees' Provident Fund Organisation (EPFO) issued guidelines in Nov 2019 to its field offices to settle death claims in seven days and retirement cases before a worker superannuates from the job, a move which comes days after PM Narendra Modi slammed the labour ministry for the provident fund manager's poor service.
The central provident fund commissioner informed labour minister Bandaru Dattatreya that on the PM's directions, EPFO had issued guidelines to field offices to take “proactive action to settle death claims within seven days and reti rement cases on or before the day of retirement,“ the ministry said.
Interest rates
Dec 2016: cut to 8.65%
The Times of India, Dec 20 2016
EPFO cuts interest rate to 8.65%
The Employees Provident Fund Organisation (EPFO) recommended a minor reduction in interest rate to 8.65% for the financial year 2016-17 compared to 8.8% in 2015-16 but it still remains the best investment bet given that there is no cap on how much you set aside and the entire corpus remains tax free.
The reduction in interest rate to a four-year low is in line with the falling regime although bank fixed deposit rates have seen a sharper decline due to demonetisation of Rs 500 and Rs 1,000 notes. State Bank of India, for instance, has lowered fixed deposit rates by 15 basis points (100 basis points equal one percentage point), while on deposits of over Rs 1 crore (known as bulk deposits) rates have been slashed by up to 190 basis points. In any case, with the RBI singalling a shift towards a low rate regime, the government was forced to pare returns on small savings schemes.
Trade unions were demanding that EPFO central board headed by labour minister Bandaru Dattatreya retain the rates at least year's level, something that did not appear feasible given the retirement agency's projections. At 8.8%, EPFO would have faced a deficit of Rs 384 crore, while at 8.65% it will have a surplus of Rs 296 crore.
“The decision was arrived at after detailed consultations with all stakeholders. With consensus we have taken this decision,“ Dattatreya said in Bengaluru after the meeting.Interest income from PF investments for 2016-17 has been estimated mainly on the basis of interest income received or receivable in this financial year, including surplus of Rs 410 crore from previous year, an official said.
“In 2015, the interest rate decided was at 8.8%. At that time, along with the income of EPFO, the surplus from the previous year was Rs 1,600 crore. This year, along with the income, the surplus available is Rs 410 crore,“ Central Provident Fund Commissioner V P Joy said.
The recommendation of the EPFO board needs to be ratified by the finance ministry , which notifies the rates. Last year, the finance ministry had suggested a reduction but was forced to go with the board's decision after public uproar.
Public Provident Fund (PPF)
Premature closure for studies, medical expenses
The Times of India, Jun 22 2016
Premature PPF closure okayed for studies, med expenses
Subscribers of the Public Provident Fund (PPF) can now close their accounts before maturity , but after it completes five years, for reasons such as higher education or expenditure towards a medical emergency . “A subscriber shall be allowed premature closure of his account, or account of a minor of whom he is the guardian, on the ground that the amount is required for treatment of serious ailments or life-threatening diseases of the account-holder, spouse or dependent children, on production of supporting documents from the competent medical authority ,“ the finance ministry said in a notification..
Similarly , the closure of account to seek funds for higher education will require the submission of documents and fee bills confirming the account-holder's admission in a recognised institution in India or abroad.
Withdrawals
For housing, health
The Times of India, Apr 19 2016
PF withdrawal allowed for housing, health
The labour ministry eased the planned restriction on withdrawal of contribution to the employees' provident fund. It said withdrawal can be allowed for housing, major medical treatment for self and family members, medical, dental and engineering educa tion of children, and for their marriage.
The relaxation has also been extended to members who have joined an establishment belonging to or under the central or state government, and become a member of contributory provident fund or old age pension.
These norms will come into effect from August.
The amendments were made after labour minister Bandaru Dattatreya received representations from trade unions. A government release said the ministry had decided to pay the full accumulations to the credit of a member, including interest up to the date of payment, if he or she fulfils any of the above-mentioned conditions. In February , the ministry had said PF subscribers would not be able to withdraw their provident fund after attaining the age of 54 years, and will have to wait till they are 58 years old.
