The additional central provident fund commissioner has issued an order in the recent past stating that a member contributing to the PF on the wages exceeding the statutory ceiling or who had contributed to the PF on the wages exceeding the statutory ceiling cannot be debarred from exercising the option to contribute on such higher wages to the Pension Fund. The order has been issued as a sequel to a Supreme Court verdict on a series of cases connected with Employees Provident Fund and Employees Pension Scheme.
The order, however, stipulated certain preconditions for availing of pension benefits on unlimited salary by making it applicable to only those members whose accounts are maintained by EPFO and whose PF contributions on higher wages have been received by EPFO.
Members of exempted establishments and those who maintain their PF accounts with separate Trusts would not come under the ambit of this order. Another condition is that pensioners/employers to give a fresh declaration that the member had been drawing a salary of more than Rs 5000/- - Rs 6,500/- per month and the employer had deposited 12% (10%) of actual salary (above the statutory wage ceiling) as employer’s share of the EPF contribution on the basis of joint option executed under paragraph 26(6) of the scheme.
The order also called for submission of a certified copy of fresh Form 3A return in respect of the pensioners from 16.11.95.
Firstly it seems that the conditions stipulated by EPFO are intended to thwart the good intentions to pay the higher pension, as set by the Supreme Court in its order. Exempting the trusts from the purview of new orders is not justifiable in any way.
It was the PF department that actually granted exemption to those employers under Clause 27 of the Scheme when the EPFO was convinced that the members of these establishments are entitled to benefits in the nature of Provident Fund, gratuity or old age pension according to the rules of the factory or other establishments and such benefits separately or jointly are on the whole not less favorable than the benefits provided under the Act and the Scheme and that where any class of employee is exempted, the employer shall in respect of such class of employees maintain such account, submit such returns, provide such facilities for inspection, pay such inspection charges and invest PF collection in such manner as the Union govt may direct.
Thus it is obvious that such trusts formed by the exempted establishments would continue to remain under the broad administrative control of PF departments, including for investment options of the Trust. Moreover, the apex court did not mention anything about the exemption of such trusts from the ambit of their orders.
Secondly, it is highly illogical and impossible for any employer to furnish 3A return for last 22 years, especially when the PF records were not digitalised in a majority of the cases for that period. It would be pertinent to note here that as per Chapter-2 – General Office Procedure of PF Department (Annexure A – Period of retention of records – Accounts documents) 3A is not classified as a document to be preserved permanent, but it has to be kept for five years only.
Moreover, even under RTI Act Section 8(3), documents of all nature need to be preserved maximum for 20 years. It is not understood why PF authorities are now insisting the employers for furnishing documents even for more than 20 years old.
The 3A is a perfectly reconciled document based on which the annual statements of accounts in Form 23 have been issued to the members every year. Therefore recollecting this form 3A for revised pension calculation cannot be appreciated.
Moreover, the last 60 months pay taken for calculation of average pensionable salary needs to be revised to 10 months as applicable to other employees of Union/state governments, the full pension (50% of pensionable salary) would be now available to a member only by 2030 as the method followed for calculation of pension is pensionable salary multiplied by the number of years in service, which needs to be suitably modified and above all the recommendations for hiking the minimum pension to Rs 2000/- per month may be considered.
The apex court has rightly pointed out that a beneficial scheme ought not to be allowed to be defeated by reference to a cutoff date or procedural wrangles.
EPFO must think and find ways and means to implement the orders rather than putting unnecessary conditions which are difficult to be complied with.
(RAVIKUMAR V. is a Former Senior Manager (HR) and Company Secretary Autokast Ltd).
