New Delhi: Retirement fund body EPFO has decided to reduce the administrative charges to 0.65 percent of total wages of an employee from April 1, a move that will result in savings of around Rs 1,000 crore annually for about 6 lakh employers.
The Employees provident Fund Organisation's (EPFO) decision making body, the Central Board of Trustee, had approved the proposal to reduce the administrative charges to 0.65 percent from the existing 0.85 percent of total wages, on which contributions are payable.
"The Labour Ministry has notified the decision taken by the EPFO trustees last year to cut the administrative charge to 0.65 percent. This will result in total annual savings of Rs 1,000 crore for around six lakh employers covered by the EPFO," a source said.
The source said the new rate of administrative charge would be applicable from 1 April, 2017.
However, the notification provides that the employer would have to pay a minimum sum of Rs 70 per month for every non-functional establishment having no contributory member and Rs 500 per month each for other firms.
The source said the Labour Ministry has also notified the decision of the trustee to abolish administrative charges on firms to fund expenditure in implementing the Employees' Deposit Linked Insurance Scheme (EDLI), 1976 from 1 April, 2017.
After implementation of this decision now, the EPFO will meet all the administrative expenses of the EDLI scheme from interest of the EDLI corpus.
At present, the rate of administrative charges to run EDLI scheme is 0.01 percent while inspection charges are 0.005 percent for firms, which subscribes to insurance
schemes in lieu of EDLI Scheme.
The total corpus in EDLI administration account as on 31 March, 2016 was Rs 2,372.83 crore. The interest generated on such a corpus would be around Rs 17.5 crore annually.
Your guide to the latest seat tally, live updates, analysis and list of winners for Lok Sabha Elections 2019 on firstpost.com/elections. Follow us on Twitter and Instagram or like our Instagram or like our Facebook page for updates from all 542 constituencies on counting day of the general elections.
Updated Date: Mar 23, 2017 12:10:10 IST