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EPFO to Give Monthly Updates instead of Annual Statement to Check Defaults


Author :Srimoyee Pandit

Top Picks :  March 2011 Current Affairs, Economy, 2011 Current Affairs

The Employees Provident Fund Organisation (EPFO) in March 2011 decided to give monthly updates of contributions instead of an annual statement in the backdrop of high defaults in provident fund contributions by employers. EPFO expects that its measure will bring instances of defaults by employers to the notice of workers who will then demand their dues.

According to the current arrangement, the subscribers get only a small slip at the end of the fiscal with just the opening and closing balance. The subscribers therefore do not get to know how their PF amount grew through the year. Subscribers do not calculate what the total amount should be and hardly notice whether or not contributions were made in particular months.

The EPFO manages retirement savings of more than 5 crore workers in the country. The default amount identified by the EPFO through periodic inspection of random establishments in 2009-10 was about 166.12 crore. The EPFO pointed out that defaults were the highest in Tamil Nadu followed by Andhra Pradesh, Bihar, Karnataka and Kerala.

Both employers and employees are mandated to contribute 12% of basic pay to the EPFO fund every month. The entire contribution to the fund is usually made by employers who deduct the employees share from their pay and add it their own contribution. About 20000 crore to 30000 crore is added to the corpus every year.

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