CAG says EPFO earned more, paid less to members in 4 fiscals

Feb 18 2014, 22:28 IST
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In 2007-08, it earned Rs 8,706.88 crore on investments but credited Rs 7,854.60 crore only into subscriber accounts. Reuters In 2007-08, it earned Rs 8,706.88 crore on investments but credited Rs 7,854.60 crore only into subscriber accounts. Reuters
SummaryThe CAG has analysed data on interest earned and paid to subscribers by EPFO between 2006-07 and 2011-12.

Account balance was not a true reflection of sums available for distribution as interest to EPF subscribers, in the absence of non-updation of about 38.74 lakh subscribers' accounts as of March 2012.

"More than 70,000 subscribers' accounts reflected negative balances, indicating excess withdrawals. These reflected inadequate service to its subscribers.

"Its income was consistently more than expenditure on running of schemes. The EPFO also did not adhere to the investment pattern prescribed by the Ministry of Finance," CAG said.

CAG also criticised EPFO for not regulating properly the private PF trusts or exempted establishments which manage their workers PF money and accounts.

"The EPFO did not exercise expected control on the employers of exempted establishments to ensure that the exempted establishments transferred the EPF accumulations to their Board of Trustees (BOTs) and the BOTs invested the money transferred to them." it said.

It further said that the revenue collection processes in the EPFO were deficient.

"The EPFO was not very encouraging towards voluntary coverage of its schemes. Inspections of establishments were less than prescribed targets, which led to insufficient controls over establishments."

The CAG has also pointed out raising the wage ceiling of Rs 6,500. The EPFO has recently raised it to Rs 15,000 per cent month.

The workers getting basic wages including basic pay and DA up to the prescribed wage ceiling can become members of schemes run by EPFO. However once someone become a member of EPFO schemes, he remains to be subscribers even in case his or her basic wages breaches the ceiling.

About the Employees' Pension Scheme 1995, the report said: "Valuation of Employees Pension Fund is not being done in time, nor are the reports received in a time bound manner and there is significant delay in action on valuation reports."

"Many of the weaknesses, in the implementation of scheme, included in this Report, have been persisting despite earlier assurances rendered by the Ministry (of Labour) to the PAC (Public Accounts Committee) through Action Taken Notes," it said.

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