The Hindu Business Line : EPF scheme amended to ensure interest payment at retirement

New Delhi April 4 There is some good news for retiring employees. Having lost out for some time on interest on their provident fund accumulations in the absence of any decision by the Central Board of Trustees (CBT) of Employees Provident Fund Organisation (EPFO) in recent years, the CBT has now come to their aid by amending the provident fund scheme to enable the organisation to pay interest at the last decided rate, so that retiring persons need not wait till interest rate is formally notified by the Finance Ministry.

As of now, interest is credited to the subscriber's account only after formal notification. As a result, persons who have retired during fiscal 2006-07 have received interest only up to 2005-06.

Suspense account

Approximately around Rs 85 crore has not been credited to retiring employees in the last fiscal. Once the rate is decided the EPFO would come out with an advertisement informing the subscribers and they would have to lodge their claims or make refunds. The unclaimed money would be transferred to the suspense account and any shortfall in recovery of excess payment could also be adjusted from this account.

CBT trustees, however, pointed out that it is almost impossible to trace out all the retired employees because many people change their address after retirement.

According Mr D.L. Sachdev, one of the trustees and secretary of the AITUC, "This had been a problem for several years. Every year a substantial amount gets transferred to the suspense account. This amendment would rectify the situation."

In order to overcome this difficulty, the trustees have amended the rules and the Labour Minister has also approved the amendment in March this year and this is likely to be published in the official gazette soon.