PF trusts lacking government approval will be deemed valid, EPFO ​​gave last chance to companies Major Update on PF Trusts: PF trusts lacking government approval will be deemed valid; EPFO gives companies a final chance

Employees Provident Fund Organization (EPFO) has given a huge relief and golden opportunity to all those companies of the country which were operating Private PF Trust at their own level without formal government approval or exemption. EPFO, working under the Union Ministry of Labor and Employment, has announced a new special scheme, under which the process of validating PF trusts of all such companies has been started. This step will not only provide relief to employers from legal complications, but will also protect the provident fund of lakhs of employees.

What is this new scheme of EPFO ​​and why was it needed?

There are many old and big companies in the country which have created their own private provident fund (PF) trust for their employees. As per the rules, to run any private PF trust, it is mandatory to obtain official ‘Exemption Status’ approval from the government and EPFO. However, many companies were operating the trust without this final approval due to administrative shortcomings or incomplete application process. Now EPFO ​​has provided a big opportunity to all these companies to get their trust regularized without any heavy penalty or legal action.

How will companies and employers get the benefit of this scheme?

According to the new guidelines issued by EPFO, companies which did not have valid approval till now can bring their trust in the valid category by applying under this special scheme. For this, companies will have to fulfill some prescribed conditions and submit complete records of PF contribution of their employees in a transparent manner. Once this process is completed, the companies will get the status of ‘Exempted’ institution, due to which they will be completely protected from any major legal crisis or default action in future.

Security of employees’ PF fund will become even stronger

The biggest benefit of this new scheme is going to be to the employees working in private companies. When a PF Trust becomes fully legalized under government rules, EPFO’s monitoring and audit process over it becomes stronger. With this, the interest received on the deposited money of the employees (PF Interest Rate) and their social security becomes completely safe. Market experts say that this decision of the government is a big and modern step towards improving India’s corporate governance and protecting the interests of the working class.