Labour Ministry proposed to hand over Rs 10 lakh crore corpus of EPFO to a central body
The labour ministry has proposed to transfer the control of over Rs 10 lakh crore corpus of provident fund, pension and insurance schemes falling under the Employees’ Provident Fund Organisation (EPFO) to a central body. The ministry has also proposed to have a central government-appointed chairman who will head the central body.
The proposed central board will include a chairman and a vice chairman designated by the central government, five central government representatives, 15 representatives from different state governments, 10 representatives of employers along with employees of companies to which the scheme shall be applicable.
“The central government may, by notification, constitute, with effect from such date as may be specified therein, a board of trustees for whole or part of India as specified in the notification (hereinafter in this code referred to as the central board) for the administration of the funds vested in it in such manner as may be prescribed by central government,” says the draft code.
Contrary to the central board of trustees of the EPFO, the labour minister will cease to be the chairman of the board, the proposal suggests.
The ministry has distributed a preliminary draft of Code on Social Security, 2019 which will amalgamate, streamline and rationalise the significant provisions of the current eight central labour laws and set up a central board of trustees to manage all three (provident fund, pension and insurance) schemes.
The ministry has also suggested that the government establish dedicated funds for these schemes which will be managed by this central board. The draft code was distributed on Wednesday inviting comments from stakeholders by October 25.
After this three-way consultations will be conducted among the central government, employers’ representatives and employees’ representatives to finalise the code.
The Social Security Code, 2019, also suggests that all existing, as well as new workers, be given the choice to join the National Pension Scheme (NPS).
Furthermore, the code proposes that the three schemes under the EPFO – the Employees’ Provident Fund Scheme for establishment of PF, the Employees’ Pension Scheme and Employees’ Deposit Linked Insurance Scheme (EDLI) be framed for pension and life insurance benefits.
This development came a day after labour minister Santosh Kumar Gangwar had said that the ministry would invite public suggestions soon for opinion on the draft code.