NEW DELHI: The finance ministry may be egging you on to buy annuities but it is
itself found to be lax in regulating provident fund of employees of
cooperatives, semi-government organisations, universities and recognised
educational institutions.
The government has now decided to hand over the mandate of strict enforcement of provident fund norms covering close to 150 entities to the labour ministry. The Employees' Provident Fund Organisation (EPFO), which has around eight crore subscribers, reports to the labour ministry, which has been a bone of contention with North Block officials for a long time.
The move came after it was detected that in case of some top colleges, for instance, the annual payout is much lower than the interest rate offered by EPFO. Similarly, there have been complaints regarding an airline, and the Seamen's Provident Fund too faced a major scam a decade ago.
There was similarly no focused regulation of the superannuation funds offered by insurance companies led by Life Insurance Corporation, with Pension Fund Regulatory Authority of India staking claim on it.
Although the ministry has described EPF subscribers as "hostages, rather than clients", it has done little to monitor the funds governed by the PF Act, 1925, said officials.
"Since most of them are government-affiliated entities, there have not been major complaints but the finance ministry has little time to oversee them," said an official.
An official, however, said that with
PFRDA being the designated regulator, the mandate should be handed over to it.
Besides, the officer said, the regulator should not be tasked with running
pension schemes, such as the National Pension Scheme.
"The finance ministry has agreed to give the power to the labour ministry," said a senior official, adding that cabinet secretariat was approached to make changes in allocation of business rules.
Source : http://economictimes.indiatimes.com/
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