Employers get relief as EPFO approves amnesty scheme to allow delayed PF deposit
The board also approved an amendment to the EPF Scheme, 1952, under which the interest will be paid to members up to the date of settlement
Retirement fund body EPFO has approved an amnesty scheme to encourage compliance by employers, allowing them to deposit past provident fund dues without any penalty.
Central Board of Trustee (CBT), the apex decision-making body of the Employees' Provident Fund Organisation (EPFO), headed by Labour Minister Mansukh Mandaviya, on Saturday recommended the EPFO Amnesty Scheme 2024 to the central government, a labour ministry statement said.
The initiative is designed to encourage employers to voluntarily disclose and rectify past non-compliance or under-compliance without facing penalties or legal repercussions, it said.
A simple online declaration from employers will be sufficient to avail of the scheme benefits. By providing a limited window for voluntary compliance, the scheme aims to extend social security benefits to more employees, rebuild trust with employers, and promote formalisation of the workforce, it stated.
The scheme will help in the implementation of the Employment Linked Incentive Scheme, which was announced in the FY25 Budget to foster employment generation and incentivise the formalisation of jobs in the economy.
According to the statement, several small establishments (under the MSME sector or otherwise) may wish to avail themselves of the benefits under the ELI Scheme but would be worried about enrolling under EPFO. This amnesty scheme would provide them the confidence to enrol without any fear or additional financial burden.
Meanwhile, the board also approved an amendment to the EPF Scheme, 1952, under which the interest will be paid to members up to the date of settlement.
As per existing provisions, for the claim settled by the 24th of the month, interest is paid only up to the end of the preceding month.
The amendment will result in more financial benefits to EPFO members and reduce grievances.
Till now, interest-bearing claims are not processed between the 25th and the end of each month to avoid loss of interest to the members. Post the amendment, claims will be processed during the entire month, leading to reduced pendency, timely settlement and optimised utilisation of resources.
The board also ratified the extension of EDLI (Employees' Deposit-Linked Insurance) benefits with retrospective effect from April 28, 2024. Under this scheme, insurance cover in the range of Rs 2.5 lakh to Rs 7 lakh is provided to the dependents of the member in case of death.
The proposal, supported by actuarial valuation indicating a surplus of Rs 6,385.74 crore has been approved to ensure uninterrupted benefits to EPF members.
The board also approved a proposal for simplification of criteria for the empanelment of banks for the centralised collection of EPF contributions. It will now include all agency banks listed with RBI.
Additionally, the central board of trustees also approved the empanelment of other scheduled commercial banks that are not RBI agency banks but have a minimum of 0.2% of total EPFO collection. The earlier requirement for such entities was 0.5%.
Besides, the board has approved a redemption policy for ETF investments in CPSE and Bharat 22 to generate income for the EPF Scheme's Interest Account.
The policy mandates a minimum five-year holding, returns exceeding government securities, and performance above the CPSE and Bharat 22 indices.
It also approved the guidelines for investment in units issued by Public Sector Undertaking sponsored Infrastructure Investment Trusts (InvITs)/ Real Estate Investment Trusts (REITs) regulated by the Securities and Exchange Board of India.
Also, the limit for auto claim settlement facility has been extended to Rs 1 lakh from Rs 50,000 earlier, including for those seeking advances for housing, marriage, and education.