With private PF trusts and exempted trusts continuing their protest to the 9.5 per cent interest rate in 2010-11,the Employees Provident Fund Organisation has sent out fresh missives directing them to use the reserve or any surplus money available with them to fund the additional 1 per cent payout. Head office has been receiving references regarding the utilisation of the amount available in reserve and surplus account of the exempted PF trusts for payment of statutory rate of interest. It is clarified that the amount lying in the reserves can be used for the purpose of declaring interest at statutory rates or even higher than statutory rates, the EPFO has said in a circular. Ever since the Central Board of Trustees ratified the 9.5 per cent interest rate last September,many provident fund trusts that are privately managed or exempt have argued that they cannot afford the payout as they do not have a similar surplus available or have not been operational for long enough to have a reserve fund. The EPFO had accrued the Rs 1,731 crore surplus in its suspense account over a period of 58 years. To support their cause,Sharad Patil,secretary general of the Employers Federation of India recently sent the findings of a survey of provident fund trusts to the labour ministry,which revealed that just 2 of 42 trusts surveyed could afford the payout. However,based on the findings of its internal study of about 15 PF trusts,the EPFO contends that they can match the 9.5 per cent interest rate. The argument that exempt PF trusts can not fund the payout points to a mismanagement of funds available with them. If that is the case,we will look into revoking their exemption and taking over the trusts, a labour ministry official said. Exempted trusts are mandated to match the rate of interest notified by the EPFO,but the finance ministrys doubts over the maths behind the surplus calculations had given them a ray of hope. Many such trusts had also lobbied with the finance ministry against the 9.5 per cent interest rate. However,North Block has not notified the rate on the condition that the EPFO updates all 4.72 crore members accounts in the next six months. USe reserve,says PF body Employees Provident Fund Organisation has directed private PF trusts and exempted trusts to use the reserve or any surplus money available with them to fund the additional 1 per cent payout Ever since 9.5 rate was ratified,many private PF trusts argued that they cannot afford the payout as they do not have a similar surplus available Based on the findings of its internal study of about 15 PF trusts,the EPFO contends that they can match the 9.5 per cent interest rate
