A Parliamentary panel has asked the labour ministry to go for random checking of returns filed by private EPF trusts to detect any misuse of the facility and impose heavy penaly for default.
Private EPF trusts regulated by EPFO maintain provident fund accounts of their employees and manage their retirement savings.
These are called exempted establishments because they do not deposit EPF contributions of their employees with the Employees' Provident Fund Organisation (EPFO).
"In view of the rampant violation of the Act, the committee opine that mere filing of returns has not proved to be enough to protect the workers of the exempted establishment hence there still remains the scope for improvement in the checking of the returns filed by exempted establishments (Pvt PF trust)," stated Parliamentary Standing Committee on Labour in its report tabled in Parliament today.
The panel recommended that the returns filed by the exempted establishments be checked randomly to detect misuse of the facility an appropriate action be taken against the defaulting establishments.
It has also asked the labour ministry to impose heavy penalty on employers in cases where the firms are functioning and their exemptions have been cancelled for recovery of the EPF funds with them.
The committee has also suggested in case the firms are closed down and exemption has been cancelled then the subscribers should be compensated from SRF (Special Reserve Fund).
According to the information submitted by the EPFO, as on December 31, 2016, the total corpus of exempted establishment is around Rs 2.56 lakh crore including unclaimed amount.
The number of these trusts is 1,549 across the country which cover 84.42 lakh employees in formal sectors.
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