Labour Minister Bandaru Dattatreya, who was chairing the meeting of the Central Board of Trustees (CBT) sought to calm down the tempers by assuring them that he would take up the matter with concerned ministers and even Prime Minister Narendra Modi.
CBT is the apex decision making body of EPFO. Soon after the supplementary agenda item on notification regarding Senior Citizen Welfare Fund was circulated for information of trustees, the trade union members walked out of the meeting in protest against the government’s decision.
As per the notification, “any credit balance in any of the account under the following scheme (including EPF scheme) remaining unclaimed for a period of seven years from date of its declaration as an inoperative account shall be transferred by the respective institutions (including EPFO) holding them to the Fund (Senior Citizen Welfare Fund).”
Dattatreya too left the meeting midway and approached the trade union representatives to pacify them and requested them to join again. The agitated trade union representatives told the minister that the notification of the government is not legally tenable and would not stand for long in the Supreme Court. They also said it was not appropriate for the government to take away unclaimed funds of EPFO for funding their welfare schemes as this money belongs to subscribers who can claim it at any point of time.
Trade union representatives asked the minister to take up the issue with government and demanded that the CBT should move the Supreme Court to get the relief in case it is not resolved. The representative rejoined the CBT meeting, after the assurance by the minister. “We have walked out of the CBT meeting today after they circulated a notification by Finance Ministry saying that a fund would be created from credit balance remaining in the unclaimed PF accounts” All India Trade Union Congress Secretary D L Sachdev said.
Another EPFO trustee and Bharatiya Mazdoor Sangh member P J Banasure said the issue has been deliberated upon in the Finance, Audit and Investment Committee (FAIC) meeting of the EPFO and it has already rejected the proposal to use unclaimed EPF money for creation of any senior citizen welfare fund.
FAIC had discussed the proposal after PMO wrote a letter in this regard to EPFO. The EPFO trustees’ meet was called on Tuesday mainly to increase the proportion of body’s investment in Exchange Traded Funds (ETFs) in the current fiscal. A report of an expert group on ETFs was circulated to convince the trustees about increasing proportion of these investment from five per cent of investible deposits in 2015-16.
The panel constituted by FAIC has recommended that the allocation to equity can be made 10 per cent this fiscal. It was of the view that current allocation of 5 per cent incremental flows to equity may not be sufficient for meaningful contribution to overall portfolio return of the EPFO. The panel pointed out that at present the EPFO’s equity investment constitutes less than 1 per cent of the total corpus compared with the global average of around 30 per cent.
The experts also suggested that if the body will invest 5 per cent of its investible deposits in equity every year then it will take 15 years for these investments to become 5 per cent of the EPFO’s total investment. If 10 per cent is invested into equities then it will take just five years for these investments to become 5 per cent of the total portfolio, the panel said. However, the CBT decided to refer this report to FAIC for preparing a detailed recommendation on the issue so that it could be taken up for discussion in the next meeting. Earlier, Dattatreya had indicated that the proportion of EPFO’s equity investment will be increased.
The ministry had notified a pattern of investment on April 23, 2015, which allows investment in equity and related investments from 5 to 15 per cent.
Meanwhile, Govt hikes Sebi, Trai, CCI, IRDA, CERC, PFRDA, PNGRB chiefs’ pay to `4.5 lakh a month
Chiefs of regulatory bodies including SEBI and TRAI will now get a consolidated pay package of Rs 4.5 lakh per month, while their full-time members will get Rs 4 lakh each. Besides, their consolidated pay package will be raised by 25 per cent as and when Dearness Allowance goes up by 50 per cent, the Finance Ministry has said in its latest notification implementing the recommendations of the Seventh Central Pay Commission. The pay panel’s recommendation of consolidated pay package of Rs 4.5 lakh for Chairpersons of Telecom Regulatory Authority of India (TRAI), Central Electricity Regulatory Commission (CERC), Insurance Regulatory and Development Authority (IRDA), Securities and Exchange Board of India (SEBI) and Competition Commission of India (CCI) has been “accepted”, it said.
The chiefs of Pension Fund Regulatory and Development Authority (PFRDA), Petroleum and Natural Gas Regulatory Board (PNGRB), Warehousing Development and Regulatory Authority (WDRA) and Airports Economic Regulatory Authority of India (AERAI) will also get the same pay. The members of these nine regulators will get a consolidated pay of Rs four lakh per month, as per the notification.
The consolidated pay package is to be raised by 25 per cent as and when Dearness Allowance goes up by 50 per cent, the Ministry added. “All other benefits, including Travelling Allowance or Daily Allowance on tour etc, to be provided by the regulatory bodies as per their rules and regulations,” it said. These pay recommendations do not apply to the Reserve Bank of India (RBI) which regulates the banking sector.