The Centre may reconsider its move to forfeit Provident Fund (PF) savings of employees who fail to claim them for seven years, Union Labour and Employment Minister Bandaru Dattatreya said
The minister’s assurance about taking up the issue with Finance Minister Arun Jaitley was made to calm irate central trade union leaders, who walked out in protest from a meeting of the trustees of the Employees’ Provident Fund Organisation (EPFO) in the capital, over an unlisted agenda item placed at the meet to inform them about the finance ministry notification The move was announced in last year’s Budget and notified this March
Welfare fundAccording to the March 18 notification, deposits that remain unclaimed for over seven years in savings instruments such as EPF, Public Provident Fund (PPF), Post Office Savings Accounts, Post Office Recurring Deposit Accounts and National Savings Certificates, are to be diverted to finance a new Senior Citizens’ Welfare Fund
The EPFO board members were informed that the Finance Act of 2016, notified on May 14, had an overriding clause that renders any provisions of any other laws related to the issue, such as the EPF Act of 1952, ineffective The unclaimed deposits of EPF contributors cannot be diverted for any other purposes, as per the EPF scheme drafted under the 1952 law
At present, 9 23 crore out of total 15 crore accounts with deposits of over Rs 43,000 crore are termed inoperative — where no fresh accruals have taken place for three years According to official estimates, dues paid out of inoperative EPF accounts have gone up drastically from Rs 955 crore in 2011-12 to Rs 4,316 crore in 2013-14 to Rs 6,491 crore in 2014-15
Unclaimed amountsEPFO is now required to notify a list of unclaimed amounts and transfer them to the new Fund within a year of the date of such notification “Any person, including an EPF subscriber, can claim from the EPFO from any amount transferred to the said Fund up to 25 years of such transfers,” the agenda item of the EPFO trustees’ meet said
Agitated at the government going ahead with the forfeiture of employees retirement savings despite their reservations, union leaders who are on the EPFO board walked out within an hour of the meeting and staged a demonstration outside the EPFO headquarters
The Labour Minister, who is the chairman of the CBT, pacified the trade unions and persuaded them to attend the meeting “Don’t be provoked No money has been diverted to the finance ministry yet We will hold discussions with them,” Mr Dattatreya said, adding that the decision to set up a fund was taken by the finance ministry looking into the “overall social security and idea of a pensioned society”
Withdraw provisions“It is your duty to persuade the Finance Minister to withdraw the provision related to taking away the PF money of workers If the Finance Minister doesn’t agree, as a Chairman of the CBT you should file a case on our behalf,” said AITUC Secretary and CBT member DL Sachdev CITU President AK Padmanabhan said the move is a “complete violation” of the labour minister’s assurance that “there will be no inoperative account.”
