A Rs 1,731-crore “hidden treasure” that was not credited to 47 million provident fund accounts is what enabled the Employees Provident Fund Organisation (EPFO) to offer a higher 9.5 per cent interest rate to subscribers this financial year, the Comptroller and Auditor General has found.
EPFO has been giving 8.5 per cent interest to PF subscribers since 2005-06. However, in 2010-11, the PF fund manager increased the rate to 9.5 per cent, citing a surplus of Rs 1,731.57 crore.
The accumulation in the interest suspense account (ISA) of the fund manager was due to “non-updation” of accounts of 47.2 million members as on March 2010, sources in the finance ministry said. There are about 1 million accounts with EPFO.
“It was observed that interest on 47.2 million members’ accounts were yet to be credited and were pending as on March 31, 2010,” CAG said in its report.
CAG had written a letter in this regard to Labour Minister Mallikarjun Kharge last week, they informed. EPFO falls under the purview of the labour ministry.
As of March 2010, EPFO had a balance of Rs 4,672 crore in the ISA. The total income received in each year is parked in the ISA.
More From This Section
The actual interest liability on 47.2 million pending accounts is not ascertainable, the CAG said, adding: “In the absence of this, the adequacy of the above balance of Rs 4,671.83 crore to meet the future interest liability for pending accounts cannot be verified in audit.”
However, EPFO, in its reply during the audit, had said, taking the actual income and accrued liability each year, the cumulative position at the end of 2009-10 had been worked out.