EPFO to appoint custodian for securities, extend cover to contract employees of government

The central board of trustees of the Employees Provident Fund Organisation (EPFO) has approved a proposal to appoint a custodian of securities of EPFO, in a measure to separate custodial services from fund managers, which, it said, would bring more transparency in the management of EPFO corpus.

The board of trustees also approved major changes to the law governing statutory savings in order to ensure that contract employees of the government too are brought under PF cover.

In a separate proposal, the board of trustees proposed a provision to ensure that the salary (currently Rs6,500 per month) on which the contribution is made is not lower than the stipulated minimum wage in the state.

The Act also provides for automatic revision of the PF base along with the revision of salary base.

With government organisations increasingly relying on outsourced staff, especially at the class IV level, the new measure would bring contract workers in government organisations also under the social security net, the board said.

The CBT also proposed to end the privilege of large companies that are exempt from the EPFO provisions to manage their own money by taking over fund management of the 2,775 exempted establishments.