EPFO approves amnesty scheme for employers to defer provident fund deposit without penalty

Pension fund body Employees’ Provident Fund Organization (EPFO) on Saturday approved an amnesty scheme to encourage employers to comply by allowing them to make overdue provident fund contributions without any penalty.

The Central Board of Trustees (CBT), the apex decision-making body of the EPFO, headed by Labor Minister Mansukh Mandaviya, on Saturday recommended the EPFO ​​Amnesty Scheme 2024 to the central government, the labor ministry said in a statement.

The initiative is designed to encourage employers to voluntarily disclose and correct past non-compliance or non-compliance without incurring fines or legal consequences, it said.

To avail the benefits under the scheme, a simple online application from employers is sufficient. By providing a limited window for voluntary compliance, the scheme aims to extend social security benefits to more employees, restore trust with employers and promote formalization of the workforce, it said.

This scheme will help in the implementation of the Employment Incentive Scheme, which was announced in the FY25 Budget to promote job creation and encourage formalization of jobs in the economy.

According to the statement, several small businesses (in the MSME sector or otherwise) may wish to avail benefits under the ELI scheme but will be concerned about registering under the EPFO. This amnesty scheme will give them the confidence to register without any fear or additional financial burden.

Meanwhile, the board also approved an amendment to the EPF Scheme 1952 under which interest will be paid to members up to the maturity date.

According to the current rules, on a claim settled before the 24th of the month, interest is paid only until the end of the previous month.

The amendment will bring greater financial benefit to EPFO ​​members and reduce the number of complaints.

Until now, interest claims are not processed from the 25th to the end of each month to avoid loss of interest to members. After the amendment, claims will be processed throughout the month, resulting in faster processing times, timely resolution and optimized use of resources.

The Board also approved the extension of EDLI (Employee Deposit Linked Insurance) benefits with retrospective effect from April 28, 2024. Under this scheme, insurance cover ranging from Rs 2.5 lakh to Rs 7 lakh is provided to the dependents of a member in case of death.

The proposal, backed by an actuarial valuation indicating a surplus of Rs 6,385.74 crore, was approved to ensure uninterrupted benefits to EPF members.

The board also approved a proposal to simplify the criteria for selecting banks for central collection of EPF contributions. It will now include all agent banks listed on the RBI.

In addition, the central board of trustees has also approved the expansion of other scheduled commercial banks, which are not agent banks of RBI but have a minimum of 0.2 percent of the total EPFO ​​collection. Previously, the requirement for such enterprises was 0.5 percent.

Additionally, the board has approved a policy to repay ETF investments in CPSE and Bharat 22 to generate income in the interest account of the EPF scheme.

The policy requires a minimum five-year holding, returns above government securities and returns above the CPSE and Bharat 22 indices.

It also approved investment guidelines for units issued by public sector undertaking-sponsored Infrastructure Investment Trusts (InvITs)/Real Estate Investment Trusts (REITs) regulated by the Securities and Exchange Board of India.

Additionally, the disbursement limit for auto claims settlement has been increased to Rs 1 lakh from Rs 50,000 earlier, including for those seeking advance for housing, marriage and education.