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Wednesday, August 05, 2020

EPFO Board members raise red flags over lack of info on investment returns, files lost in December fire

Some of the members have sought details about the expenditure under the PM Garib Kalyan Yojana and whether the expenses have been reimbursed by the government to the EPFO.

Written by Aanchal Magazine | New Delhi | Published: July 16, 2020 3:05:25 am
A detailed action-taken report about the fire incident has also been sought, with one of the Board members having written a letter to the EPFO headquarters expressing displeasure about the non-communication to the Board members about the incident. (File)

The Central Board of Trustees (CBT) of the retirement fund body, Employees’ Provident Fund Organisation (EPFO), is locked in an internal tussle. Several members have flagged concerns about the inadequate sharing of information about the Fund’s investments, delays in approval for the interest rate for 2019-20, and a lack of disclosures regarding a fire incident in the vigilance wing of the EPFO headquarters in Delhi that took place in December last year, three Board members said.

A section of the members are learnt to have demanded a white paper from the EPFO headquarters on the investment pattern of the Fund in the last few months, especially to ascertain the impact on the equity-linked investments after the outbreak of the COVID-19 pandemic. The concerns about the Fund’s earnings and surplus have also risen on account of the huge number of withdrawals by the subscribers in the special facility that was announced by the government in March.

A detailed action-taken report about the fire incident has also been sought, with one of the Board members having written a letter to the EPFO headquarters expressing displeasure about the non-communication to the Board members about the incident.

“Many members over the last few months have been asking several questions from the EPFO headquarters about the investments, the interest rate, the fire incident and the expenses under the PM Garib Kalyan Yojana. But details are not being shared clearly with the Board members. This is public money and some bit of accountability needs to be there,” one of the Board members representing employees said.

With the Finance Ministry not ratifying the 8.5 per cent EPF interest rate for 2019-20, which was recommended by the CBT in March, a rate review is being worked upon, with the rate likely to be cut, an official said. “The Finance Ministry has not ratified the 8.5 per cent interest rate. The reconsideration of the interest rate requires a meeting of CBT. Due to the pandemic, a meeting could not be convened earlier but will be held soon, wherein a rate review decision will be taken,” the official said.

Before the CBT meeting, a meeting of the Finance, Investment and Audit Committee (FIAC) has to take place and it is likely to happen soon, another Board member representing employers said.

Query sent by The Indian Express to the EPFO went unanswered.

Some of the members have also sought details about the expenditure under the PM Garib Kalyan Yojana and whether the expenses have been reimbursed by the government to the EPFO. Under the scheme, the EPFO is bearing the 24 per cent contribution for employers and employees for establishments having 100 workers with 90 per cent of them earning a monthly income of up to Rs 15,000. A senior government official said Rs 894 crore has been disbursed under the PM Garib Kalyan Yojana for the months of March and April so far.

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