CBT agreed to cover around 62 lakh volunteers of Anganwadi, Asha and mid-day meal workers under social security scheme.
New Delhi: Retirement fund body EPFO's trustees today deferred the discussion on the proposal to increase its investments in ETFs to 15 per cent, from the current 10 per cent of investible deposits, in 2017-18.
However, the Central Board of Trustees (CBT) agreed in principle to cover around 62 lakh volunteers of Anganwadi, Asha and mid-day meal workers under the social security scheme run by the Employees' Provident Fund Organisation (EPFO).
Besides, the trustees also decided to allow all banks including private ones to collect contributions from employers and make payments to employees in addition to SBI, nationalised banks and payGov platforms on a pilot basis.
On being asked about a decision to further enhance the equity investment cap of the provident fund money, Union Labour Minister Bandaru Dattatreya said the matter was not discussed at the CBT meet.
"The proposal was not discussed. We will discuss it in the next meeting to be held in 15-20 days," Dattatreya, who chaired the trustees' meeting, said. The EPFO can invest 5 to 15 per cent of its investible deposits into equity or equity linked schemes as per its investment pattern.
However, the EPFO wanted to deliberate on the proposed move of raising its investments in ETF in the meeting of its apex decision making body CBT. Taking cautious steps, the retirement fund body had decided to invest only 5 per cent of its investible deposits of around Rs 1 lakh crore every year into stock market in
The body was so conscious that the trustees and government top brass on board of the CBT chose exchange trade funds for their venture into the stock market. The EPFO has invested Rs 18,069 crore in the ETFs till February 18, 2017 and yielded a return of 18.13 per cent on these investments.
During the 216th special meeting of the CBT here, the body has decided to extend Employee Enrollment Campaign till June 30, 2017. The campaign aims to enroll left out employees and provides incentives to employers in the form of waiver of administrative charges, nominal damages at Re 1 per annum and waiver of employees share if not deducted.
"The CBT took note of the extension of Employees' Enrollment Campaign (EEC) by the government for additional three months beginning April 1, 2017," the EPFO statement said.
In an important decision, the statement said the CBT recommended to the central government to consider issuing a notification for extending social security benefits to the volunteers of various schemes workers i.e. Anganwadi, ASHA, mid-day meal workers under the ambit of EPFO.
The board of trustees, it said, has also decided to allow banks to collect contributions from employers and make payments to employees in addition to SBI, nationalised banks and payGov platform through direct net banking services.
This introduction is expected to bring down the cost for employers for transactions and will facilitate more options for employers/employees to transact with the EPFO. For collection of contributions through aggregator, competitive
bids may be called for from all banks, it said.
The CBT also approved a new eligibility condition for grant of exemption under the EPF and MP Act to establishments. The exempted establishments are those employers who manage their workers EPF accounts as well as funds themselves.
The statement said that to be eligible to be considered for exemption under the Act, the establishments would henceforth require compliance with EPFO as an un-exempted establishment for a minimum period of 5 years and should employ at least 500 employees with minimum corpus of least Rs 100 crore at the time of seeking an exemption.
The CBT has decided that this rule will apply to prospective establishments and for existing establishments the matter will be examined separately. The other issue that could not taken up for discussion was raising the wage ceiling for coverage of employees under the EPFO's social security net to Rs 25,000 per month from existing Rs 15,000 per month.
At present, all those employees getting up to Rs 15,000 per month basic wages are required be mandatorily covered under the EPFO scheme. Employees' State Insurance Corporation (ESIC), which provides health insurance to formal sector workers, has already increased its wages ceiling to Rs 21,000 per month from Rs 15,000 per month.
The EPFO trustees have also deferred the proposal to amend the EPF & MP Act for making provident fund contributions optional for employees in apparel and made-ups sector.
A CBT member said, "The issue was discussed in the meeting. All trade union leaders on board of the CBT have opposed the move saying it would set a new precedent of giving exemptions from making PF contributions by workers."
The member said, "After recording the comments of the CBT members, the proposal was deferred for discussion to the next meeting."
Trade unions are of the view that this move will encourage such an exemption for other sectors as well in future and might defeat the purpose of retirement savings.
Earlier last year in June, the Centre brought a package for the textile and apparel sector which was later extended to made-ups also in December 2016.
Among other sops in the package, it was announced that EPF shall be made optional for employees earning less than Rs 15,000 per month in these segments.
However, it was a Cabinet decision but it could not be implemented without amending the EPF & MP Act 1952. Once approved by the CBT, the proposal would have to go through the floor test in both the Houses of Parliament.
Besides, there was a proposal to provide health insurance scheme to the 50 lakh pensioners of the Employees' Pension Scheme through Employees State Insurance Corporation (ESIC).
Although the board agreed in principle to approve the proposal but a final call would be taken on this in the next meeting of the CBT. Earlier, back of the envelop calculations done by ESI had estimated Rs 200 monthly premium per person for providing health cover under its scheme to the EPFO pensioners.
The proposal is aimed at providing health cover to EPFO pensioner, who get very little amount as pension and hence healthcare is out of their reach.