New Delhi: The union government has clarified that the members of the retirement fund body Employees Provident Fund Organisation (EPFO), who have made EPF contributions on wages above the statutory limit, would be benefited accordingly.
At present, the statutory wage limit for becoming a member of the EPFO is Rs 15,000 per month.
In order to contribute more than the statutory ceiling, the employers are required to exercise an option for higher contributions.
"Regarding the pension, those who remitted the contribution to EPF, on full salary (above statutory ceiling), now they would get pension, even if they did not give the option before 2006," labor minister Bandaru Dattatreya informed the Lok Sabha in response to a question by Kollam MP N K Premachandran of the RSP.
"All the EPF pensioners can avail the benefits," he said.
The order by the EPFO said, "In a situation where the deposit of the employers' share at 12 percent has been on the actual salary and not the ceiling amount, the Provident Fund Commissioner could seek a return of all such amounts that the employees concerned may have taken or withdrawn from their provident fund account before granting them the benefits of the pension scheme. Once such a return is made in whichever cases such return is due, consequential benefits in terms of this order will be granted to the said employees."
The EPFO members can contribute towards social security schemes like EPF and Employees Pension Scheme 1995, on wages higher than the statutory limit as one's remuneration increases with passage of time.
Firms to save Rs 1,000 crore a year
The EPFO has cut administrative charges to 0.65 percent of total wages of an employee from April 1, a move that will result in savings of around Rs 1,000 crore annually for about 6 lakh employers.
The EPFO decision making body, the Central Board of Trustee, approved the proposal to reduce the administrative charges to 0.65 percent from the existing 0.85 percent of total wages, on which contributions are payable.
The source said the new rate of administrative charge would be applicable from April 1, 2017.
The source said the labor ministry has also notified the decision of the trustee to abolish administrative charges on firms to fund expenditure in implementing the Employees' Deposit Linked Insurance Scheme (EDLI), 1976, from April 1.
After implementation of this decision now, the EPFO will meet all the administrative expenses of the EDLI scheme from interest of the EDLI corpus.
At present, the rate of administrative charges to run EDLI scheme is 0.01 percent while inspection charges are 0.005 per cent for firms that subscribe to insurance schemes in lieu of EDLI Scheme.
The total corpus in EDLI administration account as on March 31, 2016, was Rs 2,372.83 crore. The interest generated on such a corpus would be around Rs 17.5 crore annually.