A Parliamentary panel has suggested that retirement fund body EPFO should act as the sole regulator for all categories of provident funds particularly private PF trusts.
"The committee has strongly recommended that the government, if required, may amend various Acts and authorise Employees' Provident Fund Organisation (EPFO) to act as sole regulator for all categories of provident funds." It said that ministries of finance and labour informed that a consensus has been developed in the government departments that the EPFO should act as sole regulator for all such provident funds trusts including those managed by the exempted, excluded and other categories of organisation or establishments.
The Committee is convinced that a strong regulatory system should be in place for all PF trusts.
At present the panel noted that the EPFO is not the sole PF organisation or regulator in the country. The provident fund of private establishments/organisation/PSUs largely come under the EPFO purview.
There are two categories exempted and excluded. Under the exempted categories, the EPFO has the power to exempt large organisation from depositing EPF with the body. The EPF can be maintained by a trust created by the organisation for the purpose.
Under the excluded category, a particulary industry's PF has been excluded from purview of the EPFO under various Acts. These provident funds regulated by different ministries like shipping, coal, railways, banking, government PF and other PFs.
The panel observed that there is no formal regulating system for organisation on matters of PF under the PF Act 1925 and the excluded category of PF is not regulated either by their respective ministry or the EPFO.
It was of the view that various organisations or establishments which fall under excluded category have themselves developed their own rules, which, many times, are not in the interest of the employees, workers or labourers and leade to no discipline on the type of investments made from the PF corpus.
The committee said, "It has been noticed that various banks managing their own PF, sometime attach the PF credit/contributions in the name of disciplinary action, which is arbitrary and illegal. Therefore there is a need to establish norm by Labour Ministry to act as guidelines to these organisations for formulating their rules for the sake of uniformity as well as for the welfare of their employees.
The panel also asked the Labour Ministry to collect with regard to total number of PF trusts under the PF Act 1925, the number of subscribers, total contribution from subscribers, so that unclaimed amount lying in these trusts can be identified or utilised for the benefits of its subscribers.
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