The Employees' Provident Fund Organisation and members of the Central Board of Trustees of the PF body are set to attend a meeting today, November 23, where a number of topics will be discussed. However, all eyes will be on whether the EPFO will change its decision of not paying pension on full salary to employees of Exempt Companies.
The Supreme Court in October 2016 had ordered the organisation to pay pension on full salary, after which the EPFO had said that it would give pension on full salary to the members of Employees' Pension Scheme (EPS) but had not specified if the move was applicable to Exempt or Un-Exempt organisations. Later, it had decided that the regulation was applicable to only the employees of Un-Exempt Organisation, reported the Times of India.
Exempt organisations are those, whose Employees Provident Funds are managed by private firms, whereas Un-Exempt organisations are those who funds are managed by the EPFO's trust.
Currently, the EPFO accepts a contribution at 8.33 percent of salary, the contribution not exceeding Rs 15,000. In tune, the pension is also given as per this amount each month. The EPFO has been refusing to remove the ceiling and of Rs 15,000 because if the employees make a contribution on full salary, the pension will also have to be paid on the basis of the full average monthly salary at the time of retirement.
Speaking about EPFO's stand on refusing to pay pension on full salary, CBT member and INTUC office bearer Ramen Pandey said that the EPFO changed its earlier decision of paying pension on full salary despite issuing a circular on it. The organisation's move has also been slammed by numerous other board members, due to which this is going to be a hot topic of discussion at today's meeting.
Meanwhile, the meeting may also see a decision on the exit policy for equity investments and the body will need to come up with a plan on how it will monetise its stock options. "The CBT will take up the exit policy of EPFO's equity investments and whatever they decide, the fund managers of EPFO will follow," Mint quoted labour secretary M. Sathiavathy as saying.
The body will have to come up with a clear plan so that the employees, whose funds the organisation is managing, fully understand the benefits of these investments. "The workers whose money EPFO is managing need to know what is the benefit they are getting because of the equity investments. Unless you have an exit policy then how will you quantify the growth of your investments," Virjesh Upadhyay, a CBT member representing employees, told the daily.
However, the PF interest rate that has grabbed quite some attention is not on agenda for Thursday's meeting and is likely to be discussed sometime in January.