New Delhi: In its bid to clear the ambiguity over whether it is a regular account or not, the Retirement fund body, EPFO on Wednesday has decided to rename ‘Interest Suspense Account’ as ‘Interest Account’. (Business)
"We have decided to remove the word 'suspense' from Interest Suspense Account to bring more clarity and soon the legislative amendments would be done to make it effective," an
EPFO official said here after the meeting of EPFO's apex decision making body Central Board of Trustees (CBT).
The issue has been vociferously debated since last year when the Finance Ministry challenged the discovery of Rs 1,731 crore surplus in the ISA on the basis of Comptroller and Accountant General's (CAG) report that the said amount was not verifiable because suscribers’ accounts were not updated.
The controversy occurred when in September last year trustees of the Employees' Provident Fund Organisation's (EPFO) decided to provide its subscribers higher rate of return at 9.5 per cent for 2010-11 after the discovery of Rs 1,731 crore, which it described as "surplus amount" in ISA.
The ministries of Labour and Finance remained at logger heads for almost six months over the issue whether the surplus was real or not, and if the EPFO's offered rate of return was
However, the Finance Ministry on March 17 ratified the 9.5 per cent rate of return to over 4.71 subscribers of EPFO.
The ministry's approval is subject to the condition that any shortfall on account of payment of 9.5 per cent rate of return would be met by EPFO through making adjustments in the
interest rate in 2011-12.
It also asked the provident fund body to update all its subscribers' accounts in the next six months.
After the CBT nod, government will be required to amend Employees' Provident Funds and Miscellaneous Act 1952 to make the change.
SBI to manage EPFO fund till June 30
EPFO on Wednesday said its corpus of nearly Rs 3.5 lakh crore will now be handled by one of the existing fund managers, SBI, for a three month period which ends on June 30 as an interim arrangement.
The body rejected the proposal to give three month extension to its other existing fund managers -- ICICI Pru, HSBC and Reliance Capital in its trustees meet here.
These three private players were earlier managing bulk of the fund-- close to Rs 3 lakh crore--of the total corpus.
The term of the four fund managers was to expire on March 31. The EPFO had planned to appoint new fund managers for next three financial years beginning April 1.
The CBT headed by the Union Labour Minister came to this interim arrangement as EPFO is yet to complete the process of appointing new fund managers.
EPFO had started the process last year after it engaged credit rating agency CRISIL for appointing and later monitoring the performance of new fund managers.
As many as 11 Asset Management Companies (AMCs) have evinced interest to manage EPFO's huge corpus which receives incremental deposits of about Rs 30,000 crore every year.
New Delhi: In its bid to clear the ambiguity over whether it is a regular account or not, the Retirement fund body, EPFO on Wednesday has decided to rename ‘Interest Suspense Account’ as ‘Interest Account’.