ALSO READHow to link multiple EPF accounts with UAN? Here is a step-by-step guide Is there a Rs 1.25-trillion hole in the EPS? Good news: Private EPF trusts can't have interest rate lower than EPFO Portfolio management services assets gain traction as markets sizzle Tipping Point: Will interest rate by EPFO rise or fall for this year?
The central board of trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) will discuss a proposal to decrease the administrative charges for employers in a bid to boost social security coverage for the workers later this month.
The EPFO has proposed to decrease the administrative charges to 0.50 per cent from 0.65 per cent of the worker’s monthly income that goes as employer’s share. This is the third year in a row that the EPFO has proposed decreasing the administrative charges for employers. “It is recommended that the administrative charges may further be reduced to 0.50 per cent of pay to ensure that the benefits of efficiency and savings are passed on to employers. The reduced liability on establishment can provide incentive to the employers to extend social security coverage to more employees or workers,” the agenda item of the CBT meeting, to be held on February 21, said.
The EPFO meets the expenses incurred in managing the EPF accounts of employees by collecting administrative and inspection charges from employers. The EPFO is expected to collect Rs 37.6 billion from administrative charges that may reduce to Rs 8.7 billion in 2018-19 if the administrative charges go down by 0.15 per cent. “A further reduction in administrative charge to 0.50 per cent is also not expected to reduce income of EPFO to the extent of Rs 9.8 billion due to expected growth in coverage under EPF Schemes, better compliance and default management and expected future salary ceiling increase,” the EPFO said.
The administrative charges reduced to 0.85 per cent in January 2015 from 1.10 per cent earlier. It further reduced to 0.65 per cent from April 2017. The EPFO decided to go for a cut in administrative charges in the past despite increase in administrative expenses due to implementation of the recommendations of Seventh Pay Commission, and cadre restructuring in EPFO.