Private Provident fund trusts have taken care by Employees Provident Fund Organization (EPFO). Government has allowed managing their own private PF schemes to certain condition under Employees Provident Funds. These trusts are regulated by Employees Provident fund Organisation (EPFO).
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Private EPF Trust Payment
There are 1,500 private Provident Fund trusts that are set up by companies. Minister for Labor has recently going to 1,500 private employee provident fund trust to ensure that interest rate is declared by them is higher than Employees Provident Fund Office. These Employee provident fund trusts are set by companies for employee provident funds.
Further, in new initiative, there will be periodic evaluation and company monthly ranking will be set up such trusts to ensure better compliance. Also, Employees have to intimate when their EPF account is credited.
Also check PPF or Public Provident Fund account closing rules
Pvt EPF trusts not able to declare interest
Ministry of labor noticed that few private EPF trusts were not able to declare rate of interest at par with EPFO. Hence, recent circular has been issued that any shortfall in interest declared by board of trustees is to be good by employer. There are 1,500 odd companies that have been granted permission to maintain their own EPF trusts. Some trusts are small with corpus of less than crore.
While minimum interest is declare is set by EPFO and meeting any deficit by employer for running private EPF trust some were not following it. To ensure you that are covered by such private trusts. Also see recent circular relating to interest rate and also message to employees has been issued on time.
Interest rate declare by EPFO for 2016-17
For financial year 2016-17, interest rate declare by EPFO was 8.65%. Actually earnings made by private trusts are required to provide minimum interest rate to their account holders (employees) if any shortage by employer. These trusts have to make up investment team contain financial experts to ensure best financial management of trust’s funds.
Such as cancellation permission given to private EPF trust for frequent defaults. Especially for delays in payment collected from employees or for reduced interest rates. Many big companies have opted for private EPF trusts such as Tata Iron and Steel, Tata Motors, Reliance Industries, Godrej Industries, Mahindra & Mahindra etc.
Online payment calculate
However, companies have set up private EPF trusts will be calculate every so often on six factor (with a maximum of 100 points for each criteria). Such as full monthly payment of EPF increase to private trust and transfer of funds. For example, making investments, rate of return and claims settlement by private trusts and accounts audit on employees exit. Online dashboard has allowed such estimation and rating for monthly filing and annual returns. Also check what will be returns on EPF deposits
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All companies have to provide social security net via provident fund for more employees. If company has not opted for own private provident fund trust then employees are covered by EPFO. You can see nearly 15 crore employee accounts. EPFO has to talk about payment made to account holder through UMANG mobile App e-passbook.
Companies to be rating
Now, private trusts need to ensure that their employees account is intimated through text messages, emails or an e-passbook. This has to done within two days of receipt of payment from company. EPFO website has already put up 1,552 companies ranking that have set up with private EPF trusts for month of July.
Such as Steel Authority of India, West Bengal Power Development Corporation, Gujarat State Fertilizers, Godrej Consumer Products, Coats, Emami, Volvo India, American Express, Nestle India, and Mother Dairy.