Air India asks employees to voluntarily move to EPF 1952 scheme before Aug 9

Our Bureau Mumbai | Updated on July 30, 2021

Air pocket: Air India’s humungous debt is stalling its disinvestment   -  REUTERS

The employees have asked the government to compensate them while shifting them to the new Act

Air India, which is in the midst of the divestment, has asked its employees to voluntarily move to the Employees' Provident Funds & Miscellaneous Provisions (EPF & MP) Act 1952 before August 9. Meanwhile, the employees have asked the government to compensate them while shifting them to the new act.

Air India has thousands of employees who have been employed over the past several years. Several of these employees enjoy benefits under the PF Act of 1925, however, as per the norms, post the divestment, the employees will have to be transferred to the 1952 scheme.

The employees have been given two options; a compulsory transfer which mean that after disinvestment, the new company as a private entity will be compulsorily covered under the EPF & MP Act, 1952 unless specifically notified by the Central Government as an exempted Trust. The other option is voluntary transfer wherein members (employees) of the Trusts have the option to voluntarily move from PF Act. 1925 to EPF & MP Act 1952 before disinvestment.

However, for voluntary transfer, the consent of more than 50 per cent of the employee members of the Trusts is a prerequisite.

According to the statement, for the transfer to EPFO, post-PF accumulation of each employee along with cash would be required to be transferred to EPFO. This would entail the requirement of premature liquidation/sale of Securities held by the Trusts. This exercise may result in surplus/ shortfall in the corpus depending on market conditions.

The employees were given to understand that post-transfer to EPF & MP Act, 1952. employees would be able to take advantage of a higher contribution at l2 per cent to their PF instead of the existing l0 per cent with equal higher contribution also by the employer.

Published on July 30, 2021

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