Provident Fund monthly statement

Public Provident Fund (PPF) | admin | March 31, 2011 at 6:27 am

Faced with high defaults in provident fund contributions by employers, the Employees Provident Fund Organisation , or EPFO, has decided to give monthly updates of contributions instead of an annual statement.

The EPFO expects this will bring instances of defaults by employers to the notice of workers, who, in turn, will put pressure to demand their dues.

The EPFO, which manages retirement savings of more that 5 crore workers, has been computerising its offices across the country and will be in a position to provide monthly information from the next fiscal.

At present, subscribers only get a small slip at the end of the fiscal with just the opening and closing balance and have no idea about how the amount has grown through the year.

"Often subscribers do not calculate what the total amount should be and do not notice even if contributions have not been made in particular months," Central Provident Fund Commissioner Samirendra Chatterjee told ET. Once monthly data is available, omissions can be easily identified, he added.

The default amount identified by the EPFO through periodic inspection of random establishments in 2009-10 was about 166.12 crore. The EPFO expects more complaints about defaulting employers once the monthly statements are made available to employees.

Defaults have been highest for establishments in Tamil Nadu followed by Andhra Pradesh, Bihar, Karnataka and Kerala.

"Every subscriber is expected to have a detailed statement from 2012-13," Chatterjee said.

Both employers and employees are mandated to contribute 12% of basic pay to the fund every month. The entire contribution to the fund is usually made by employers who deduct the employees share from their pay and add it their own contribution.

About 20,000 crore to 30,000 crore is added to the corpus every year.

Source: Economic Times