Employees’ Provident Fund Organisation
(Ministry of Labour & Employment, Govt. Of India)
No.: WSU/17(2)2000/4636 Dated:23/05/2012
Subject: Payment of PF accumulations after closure of establishment, in absence of Form 3A/6A.
May kindly refer to the subject cited above. As you are aware that the establishments covered under the EPF and MP Act, 1952 are required to remit provident fund contribution on monthly basis in respect of all the eligible employees. However, till 31.03.2012 (Before introduction of ECR) the contributions were reflected in the member’s account only after receiving details of subscription in Annual Returns i.e. 3A and 6A. At times, these returns were not submitted by the employers of the closed establishments although the PF office was in receipt of contributions by way of monthly remittances or recovery of the amount in default. The compliance measures initiated against such establishments to procure the returns, many a times did not yield result due to non-traceability of either the employers or the records. This finally results in non-payment of PF accumulations to the members.
In order to mitigate the hardship to members to claim their PF accumulation in above situation a proposal was placed before the CBT, EPF in its 193rd meeting held on 30.03.2011. The CBT, EPF in the said meeting approved the proposed scheme, which is to be known as ‘Disbursement Scheme’.
Two major categories of establishments have been identified where the credit of contribution to the members’ account and its disbursement is to be processed in the scheme:
A) The establishments which have earlier submitted the Form 3A or 6A but have discontinued later,
B) The establishments, which have never submitted the Form 3A or 6A.Online GST Certification Course by TaxGuru & MSME- Click here to Join
Since in existing framework of the Act and Scheme, where provisions for protecting member’s interest has been laid down quite rigidly and no apparent solution was available to the above problem, following action are suggested:-
i) For establishments, indicated in point A) above:
a) The last return (3A or 6A) submitted by the employer may be taken as base document for crediting the balance amount into members’ accounts.
b) The amount recovered may be divided proportionately amongst the members whose names appeared in the above said return, after consultation with the concerned employer and workers’ representatives, wherever possible.
c) After completing, the action described in point (a) & (b) above, the proposal may be placed before the Regional Committee for approval.
d) The Regional Committee, after satisfying itself that due diligence has been exercised by the PF office and the Employer, and the details of the employees cannot be retrieved through routine process, it will consider the proposal submitted by the PF office for approval.
e) After approval by the Regional Committee, the scheme of disbursing the recovered amount amongst the members may be published in the local newspaper with the names of beneficiaries with specific mention that if any other person who considers that his interest has not been taken care of in the said scheme may file his objection within 30 days from the date of publication of such scheme.
f) If no objections are filed within the specified period, the intended amount may be disbursed amongst the members covered in the said scheme otherwise the revised disbursement may be made if the claim of the member filing objection is accepted.
ii) For establishments, indicated in point B) above:
a) The concerned PF office may publish a Public Notice in a local newspaper to the effect that any person who claims to have worked in the said establishment during the specified period, may submit the proof of his period of employment and wages drawn to that PF office, with in 30 days from the publication of the Notice so that he could be considered for being listed as PF beneficiary, and his entitlements.
b) After expiry of the notice period, the details of the persons who have proved their employment and wages drawn in that establishment beyond doubt, may be prepared in consultation with employer’s and worker’s representative, wherever possible, for placing the proposal for disbursement before the Regional Committee.
c) The Regional Committee, after satisfying itself that necessary records cannot be retrieved with due diligence, may approve the above proposal for disbursing the accumulations amongst the employees so selected.
Any amount remaining undisbursed after the said exercise may be transferred to Special Reserve Fund for meeting out any future contingency in this regard.
The Disbursement Scheme as stated above is circulated herewith to the field offices for implementation. Kindly acknowledge the receipt.
Financial Advisor & Chief Accounts Officer