EPFO decides to impose penalty on PF trusts for violating investment
rules
Retirement fund body EPFO has decided to impose surcharge on private PF trusts for any violation of investment rules and may withdraw exemptions in case of serious lapse, reported PTI. In the organised sector, firms run private provident fund trusts (PPFTs) for managing their workers funds and accounts themselves. These PPFTs are also called exempted establishment and the members of such trust enjoy benefits at par with the subscribers of Employees' Provident Fund Organisation (EPFO). "..failure to make investments as per the directions of the government shall make the board of trustees (of PPFTs) separately liable to surcharge as may be imposed by the Central Provident Fund Commissioner or his representative," an office circular for field office of EPFO said. These trusts as well as their regulator EPFO make investments of the fund as per the investment pattern prescribed by the government. According to the circular, deviation can be regulated by the levy of surcharge within the securities class. However "If the trust invests in a security/scrip in which investment is not at all permitted, it cannot be said to be a deviation but violation, which may attract cancellation or withdrawal of exemption/relaxation," it stated.
Retirement fund body EPFO has decided to impose surcharge on private PF trusts for any violation of investment rules and may withdraw exemptions in case of serious lapse, reported PTI. In the organised sector, firms run private provident fund trusts (PPFTs) for managing their workers funds and accounts themselves. These PPFTs are also called exempted establishment and the members of such trust enjoy benefits at par with the subscribers of Employees' Provident Fund Organisation (EPFO). "..failure to make investments as per the directions of the government shall make the board of trustees (of PPFTs) separately liable to surcharge as may be imposed by the Central Provident Fund Commissioner or his representative," an office circular for field office of EPFO said. These trusts as well as their regulator EPFO make investments of the fund as per the investment pattern prescribed by the government. According to the circular, deviation can be regulated by the levy of surcharge within the securities class. However "If the trust invests in a security/scrip in which investment is not at all permitted, it cannot be said to be a deviation but violation, which may attract cancellation or withdrawal of exemption/relaxation," it stated.
