BPO India, Employee benefits India,Service Provider India, Payroll India, Accounting Services India, Claim Processing India

Q & A with RPFC

Q-1. Employer chases contractors for PF compliance but the Contractor is often indifferent. Even though

employer issues warning notices and holds back contractor payments till challans are submitted still the

contractor delays in challan payments. In this situation how is the employer at fault? What more can the

employer do?

A-1.

(a) Para - 30(1) & (3) of EPF Scheme states that the Employer shall in first instance pay both the contribution

along with Administrative Charges payable by himself and also on behalf of the member employed by him directly

or by through a contractor.

No Compliance of the aforesaid Provisions is a fault.

(b) The Employer shall comply with the provisions of Sub-Para (1) & (3) of Para-30 of EPF Scheme, 1995,

Sub-Para 2 of Para 8 of EDLI Scheme, 1976 and Para 4 of EPS, 1995.

(c) Let Employer realize that it is his liability, even if Contractor doesn't comply.

Q-2. (i) In case Contractor delays in PF payments should employer deduct the PF dues from the Contractor's

bill & submit to RPFC? Would there be any legal repercussions?

(ii) Can RPFC provide the format for a standard notice to be issued to contractors vis-a-vis forcible

deduction of PF dues from contractor's bill if the contractor doesn't pay his dues within the 15th of the month?

A-2.

(i) Yes. In case the Contractor is allowed to make separate compliance the liability of the Principal Employer

does not go. Hence, the provision of Para-30 is applicable.

(ii) Providing standard notice for employer to recover dues from the Contractor is not statutory obligation of

RPFC.

Q-3. In remote areas often the contractual service is difficult to obtain and the employer has to depend on

particular contractors so termination of contract for non-PF compliance is not the answer. How can the employer

be held liable in such a situation?

A-3.The Employer has to make/devise his own mechanism to meet the statutory obligation in such cases.

For Example : To meet the statutory obligation the employer may make payment in advance on higher side

and adjustment, if any, may be made in return.

Q-4. Can RPFC clarify whether PF deduction is to be made on minimum wages or Basic Wages or Basic and DA?

A-4. Deduction to be made as per Section 6 read with Para 29 of EPF Scheme, 1952 i.e., Basic+DA+Cash value

of Food Concession and Retaining Allowance, if any.

Q-5. Often in the coarse of 7A hearings contractors are asked to bring the notification of minimum wages as

applicable from time to time. They do not do so and the case drags on. Can RPFC do something about this

deadlock?

A-5. In order to determine the correctness of the dues 7A Authority may call for evidence like this and

adjournment etc. are decided on merit.

Q-6. Why doesn't RPFC issue at par cheques to people who receive their settlement cheques outside Kolkata?

At par cheque facility is now provided by all banks. Otherwise member has to again send his cheque for

outstation - clearing leading to clearance charges and delay in credit.

A-6. The present Banking System has been adopted by our Central Office, which is applicable to all over India.

Unless the same system is changed and also Bank is agreed, it is not at all possible for RPFC to issue at par

cheque facility. But once, NSSN Project comes into operation, at par becomes practical.

Q-7. At the time of final settlement intimation letter to member does not mention upto which date member has

been paid interest by the RPFC. Can RPFC do something about this lack of transparency?

A-7. Till the date of settlement the interest would have been paid. It is understood. Hence, no need of such

provision.

Q-8. How is withdrawal benefit under EPS, 1995 actually being calculated? Does this not appear to match TableD

in the act? Can RPFC please work out the payments in the following two cases:

(a) Member's wages at exit : Rs. 6500

Years of continuous service : 9 years

Withdrawal Benefit : ?

(b) Member's wages at exit : Rs. 6500

Years of continuous service : 1 year

Withdrawal Benefit : ?

A-8. Withdrawal Benefit Under EPS, 1995

Example: Pensionable Service - 9years

Wages - Rs. 6500/-

As per Table D - Withdrawal Benefit - 6500 X 9.88 = Rs. 64,220/-

2.(a) [Assuming Past Service – 4 Years & Pensionable Service – 5 Years. ]

Past Service - 4 years. Wages as on 15.11.95 – Rs.5000/-

Pensionable Service – 4 yrs. 11 months 14 days – i.e. 5 years

Wages as on exit – Rs.6500/-

For past service Benefit - 5000 x 0.84 x 1.536 - Rs.6451.20

Wages x Table A x Table B

For Pensionable Service - 6500 x 5.28 - Rs.34320.00

Wages x Table D

Total Benefit - Rs.40,771.20

i.e. Rs. 40,771/-

(b) [Assuming Past Service – 4 Years & Pensionable Service – 5 Years. ]

Past Service - 4 years. Wages as on 15.11.95 – Rs.5000/-

Pensionable Service – 5 yrs. 0 months 10 days – i.e. 5 years

Wages as on exit – Rs.6500/-

For past service Benefit - 5000 x 0.84 x 1.689 - Rs.7093.80

Wages x Table A x Table B

For Pensionable Service - 6500 x 5.28 - Rs.34320.00

Wages x Table D

Total Benefit - Rs.41,413.80

i.e. Rs. 41,414/-

3. Pensionable Service - 01 year

Wages - Rs. 6500/-

As per Table D - 6500 x 1.02 – Rs.6630/-

Note : Less than 05 years – Factor 1.536 as per Table B

Less than 06 years – Factor 1.689 as per Table B

Q-9. Members often have transfer-ins coming into their account from the previous employer(s). However, at the

time of final settlement it is being invariably found the transferred amounts are being omitted by RPFC.

Can’t R.P.F.C. set up a system of sending an intimation letter to the employee concerned when a transfer comes

into his account so that it is ensured the transfer has been recorded in R.P.F.C.’s Books.

A-9. The problem has been noted. The system of sending intimation letter after effecting transfer in entry is to

be adopted shortly in consultation with FA & CAO.

Q-10. Members opt for Voluntary PF contributions. However at the time of Annual Accounts this amount is

invariably being missed in the annual accounts slips issued by RPFC. Can some check be kept on the system

for recording or capturing VPF?

A-10. To avoid missing entry in respect of voluntary contribution it will be highly appreciated if the employer

submits a separate list showing Name, Account No. of the Employees along with Form No. 3A(R) & 6A(R).

Q-11. Can PF Trust refuse to accept VPF from employees? Will this go against their exemption status?

A-11. Provident Fund Trust cannot refuse to accept VPF from employees and if they do so that will go

against their exemption status.

For getting exemption u/s 17 or Para-27, 27A of EPF Scheme, 1952 the prime condition is that benefit shall not

be less favourable than the benefit provided in the Scheme.

As per provision of Sub-Para 2 of Para 29 a Member if he so desires can contribute exceeding the

statutory rate.

In view of the above PF Trust cannot be refuse to accept VPF.

Q-12. Suppose a Company having a PF Trust shifts its Head Office from Kolkata to Siliguri but continues to

comply in Kolkata for Pension. Also suppose the Company is not Factory based. Can Siliguri EPF. Office insist on

shifting the coverage from Kolkata to Siliguri even though there is no Factory?

A-12. Compliance jurisdiction rests with Kolkata Office unless the employer is permitted on his request to make

compliance in Siliguri on Administrative ground.

Q-13. Suppose a Trust wishes to surrender its P.F. Exemption.

a.What is the procedure for transfer of its existing securities to R.P.F.C.?

b.Will the securities be valued at par or at the NSE rates? Unless the valuation is done at fair market price the

Trust loses out.

A-13.

(a) After cancellation of exemption –

(i) Past Accumulation Statement to be submitted within 25 days of cancellation of exemption.

(ii) Liquid Cash in Bank to be transferred within 10 days.

(iii) Securities to be transferred within 30 days.

All securities to be transferred in the following manner :

“PAY TO CENTRAL BOARD OF TRUSTEES EMPLOYEES’ PROVIDENT FUND.”

No other endorsement is acceptable. No abbreviation in the manner of endorsement is acceptable.

(b) Regarding valuation of Securities there is clean guideline approved by the Central Board of Trustee.

(i) Securities like G.P. Notes, Central/State Government Securities are to be valued at COST Price.

(ii) Securities like National Savings Certificate, National Plan Saving Certificate appreciated value of such

Certificate to be taken at the time of transfer provided such appreciated value has been accounted for in

Member’s Account.

Q-14. When following up about a pending claim we are often told even after 15 days’ of submission the claim has

not reached the concerned group. Why does it take so much time for the claim to go from receiving section to

the Group? Can RPFC please look into this?

A-14. I beg to differ from this opinion. Most of the claims reach to the concerned Group within 2/3 days. Few

cases takes time to reach the concerned Section due to System Problem and specially in respect of the

Establishments where two files are running in two building. One is for Exempted and the other for Un-exempted.

However, the problem has already been noted and effective measure has been taken.

Q-15. Issues relating to Pending Declaration of Rate of Interest for 2003-04 :-

a. Members are getting restless because the annual accounts slips having not yet been issued for 2003-04.

Can’t R.P.F.C. issue the slips w/o the interest part as done in claims settlement?

b. How can members be assured they will actually receive the balance claim amount due on account of interest

for 2004-05 after this is declared? Shall they have to file another Claim? How is R.P.F.C. keeping track of

such pending claims?

A-15.

(a) Decision at Head Quarters is pending.

(b) Once notification is issued interest portion due is settled automatically without calling for any

separate claim and shall go into their Bank Accounts already available with us.