Law and You > Labour Laws > The Code on Social Security, 2020 > Board of Trustees of Employees’ Provident Fund (S. 4 CSS, 2020)
The Employees’ Provident Fund (EPF) in India is previously governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and now under the Code on Social Security, 2020.. This Act provides for the institution of provident funds, pension funds, and deposit-linked insurance funds for employees in factories and other establishments. The EPF scheme is a significant part of India’s social security system, aimed at ensuring financial stability and security for workers in their post-employment years. The Act serves as a cornerstone of India’s social security framework, ensuring financial security for workers. The EPFO’s effective administration and the Central Board of Trustees’ governance ensure that these benefits are efficiently delivered, fostering a secure financial future for India’s workforce.
Employees’ Provident Fund Scheme (EPF) mandates contributions to the provident fund, providing a lump-sum payment to employees at retirement. Employees’ Pension Scheme (EPS) provides pension benefits to employees upon retirement, as well as to their families in the event of the employee’s death. Employees’ Deposit-Linked Insurance Scheme (EDLI) offers life insurance coverage to employees linked to their provident fund contributions.
Board of Trustees of Employees’ Provident Fund:
Section 4(1) of the Code on Social Security, 2020 gives provision for the constitution of the Board of Trustees of the Employees’ Provident Fund (EPF). The Central Government may, by notification, constitute, with effect from such date as may be specified therein, a Board of Trustees of the Employees’ Provident Fund to be called the Central Board, for the purposes of Chapter III dealing with Social Security Organisations and the provisions of this Code relating to that Chapter, for the administration of the funds vested in it in such manner as may be prescribed by the Central Government.
Constitution of the Central Board of Trustees (EPF):
The Central Board of Trustees (CBT) is the main body responsible for the administration of the Employees’ Provident Fund Scheme, the Employees’ Pension Scheme, and the Employees’ Deposit-Linked Insurance Scheme. It has following members:
- Chairperson: To be appointed by the Central Government.
- Vice-Chairperson: To be appointed by the Central Government.
- Central Government Representatives: not more than five persons nominated by the Central Government, including officials from various ministries.
- State Government Representatives: Not more than fifteen persons representing Governments of such States as the Central Government may specify in this behalf, appointed by the Central Government.
- Employer Representatives: Ten persons representing employers of the establishments to which the schemes referred to in sub section (1) of section 15 applies (for Employees’ Provident Fund Scheme), to be appointed by the Central Government after consultation with such organisations of employers as may be recognised by the Central Government in this behalf.
- Employee Representatives: Ten persons representing employees in the establishments to which schemes referred to in sub-section (1) of section 15 applies (for Employees’ Provident Fund Scheme), who shall be appointed by the Central Government after consultation with such organisations of employees as may be recognised by that Government in this behalf.
- Ex-officio Member: The Central Provident Fund Commissioner.
Status of the Central Board of Trustees:
According to Section 4(2) of the Code on Social Security, 2020 the Central Board shall be a body corporate by the name of Board of Trustees of the Employees’ Provident Fund, having perpetual succession and a common seal and shall by the said name sue and be sued.
Tenure of the Central Board of Trustees:
According to Section 4(6) of the Code on Social Security, 2020 the terms and conditions, including tenure of office, subject to which a member of the Central Board shall discharge their respective duties may be such as may be prescribed by the Central Government: Provided that a member of the Central Board shall, notwithstanding the expiry of the tenure of his office, continue to hold office until his successor is appointed.
Functions of the Central Board of Trusties:
- Administration of Funds: The Central Board is responsible for the administration of the funds established under the Employees’ Provident Fund Scheme, Employees’ Pension Scheme, and Employees’ Deposit-Linked Insurance Scheme.
- Investment of Funds: The Board has the authority to invest the funds in accordance with the investment pattern prescribed by the Central Government, ensuring the safety, liquidity, and profitability of the investments.
- Management and Operation: The Board oversees the management and operation of the EPF, ensuring compliance with the provisions of the Code on Social Security, 2020, and other relevant regulations. Appointment of officers and staff.
- Delegation of Powers: Delegation of Administrative & Financial powers as it may deem necessary for efficient administration of the Schemes.
- Settling Claims: The Board is responsible for settling claims related to provident fund, pension, and insurance benefits of the employees and ensuring timely disbursement.
- Policy Formulation: The Board formulates policies related to the implementation of the schemes, including the maintenance of accounts, audit, and other administrative matters.
- Dispute Resolution: The Board has the authority to resolve disputes related to the implementation and administration of the EPF schemes.
- Maintenance of Accounts: Maintenance of accounts of Income & Expenditure in prescribed form and manner and submission of Audited Accounts (with comments of CAG) and Annual Report on performance of the Organisation to the Government.
Executive Committee:
An Executive Committee is constituted from within the Central Board to manage the day-to-day affairs of the EPF and ensure the efficient implementation of the schemes. The composition of the Executive Committee includes representatives from the Central Board.
According to Section 4(3) of the Code on Social Security, 2020 the Central Government may, by notification, constitute, with effect from such date as may be specified therein, an Executive Committee from amongst the members of the Central Board to assist the Central Board in performance of its functions in such manner as may be prescribed by the Central Government.
Tenure of the Executive Committee:
According to Section 4(6) of the Code on Social Security, 2020 the terms and conditions, including tenure of office, subject to which a member of the Executive Committee shall discharge their respective duties may be such as may be prescribed by the Central Government.
Functions of the Executive Committee:
Main functions of the Executive Committee are
- Opening of Sub-Regional Offices/Sub-Accounts Offices.
- Approval of the purchase of land and estimates for constructing Office buildings and Staff quarters.
- Creation of Group ‘A’ posts.
- Creation of new regions/up-gradation of existing regions.
- Hiring of office buildings on monthly rent exceeding Rs. 50,000/-.
- Consideration of the investment policy and making appropriate recommendations to the Board on liberalization of investment pattern.
- Specifying work norms for Staff and Officers of the Organisation.
- Framing/amending of the rules relating to method of recruitment, pay and allowances and other conditions of service of the Officers and Staff of the Employees’ Provident Fund Organisation.
Significance of the Central Board of Trusties:
The Central Board of Trustees (CBT) plays a crucial role in the administration and management of the Employees’ Provident Fund (EPF) under the Code on Social Security, 2020. The importance of the Central Board of Trustees can be highlighted through several key aspects:
Governance and Administration:
- Centralized Oversight: The CBT provides centralized oversight and governance for the EPF, ensuring that the scheme is managed efficiently and effectively. This centralized approach helps in maintaining consistency in policy implementation across different regions and sectors.
- Policy Formulation: The Board is responsible for formulating policies related to the management and operation of the EPF. This includes deciding on investment strategies, fund allocation, and the overall administration of the provident fund, pension, and insurance schemes.
Representation and Inclusivity:
- Broad Representation: The CBT includes representatives from the Central Government, state governments, employers, employees, and experts in relevant fields. This ensures that the interests and perspectives of all stakeholders are considered in decision-making processes, leading to more balanced and inclusive policies.
- Stakeholder Engagement: By involving a diverse group of stakeholders, the Board ensures that the voices of different sectors are heard and addressed. This engagement is critical for developing policies that are fair and beneficial to both employers and employees.
Investment and Fund Management:
- Investment Decisions: One of the primary responsibilities of the CBT is to make prudent investment decisions for the EPF funds. The Board aims to ensure the safety, liquidity, and profitability of these investments, which is vital for the long-term sustainability of the fund.
- Financial Stability: Effective management and investment of the funds by the CBT help in maintaining the financial stability of the provident fund, ensuring that the funds are available to meet the future needs of the beneficiaries.
Benefit Administration:
- Timely Disbursement: The Board is responsible for ensuring the timely disbursement of provident fund, pension, and insurance benefits to eligible employees. This is crucial for the financial security and well-being of the beneficiaries.
- Claims Settlement: The CBT oversees the settlement of claims, ensuring that the process is efficient and transparent. This helps in building trust and reliability among the beneficiaries.
Regulatory Compliance:
- Ensuring Compliance: The Board ensures that the EPF scheme complies with the provisions of the Code on Social Security, 2020, and other relevant regulations. This includes maintaining accurate records, conducting audits, and adhering to statutory requirements.
- Dispute Resolution: The CBT has the authority to resolve disputes related to the implementation and administration of the EPF schemes. This function is essential for maintaining smooth operations and addressing any grievances or issues that may arise.
Strategic Initiatives:
- Innovative Approaches: The Board can introduce innovative approaches and reforms to improve the functioning of the EPF. This includes leveraging technology for better service delivery, enhancing transparency, and implementing best practices in fund management.
- Future Planning: The CBT plays a strategic role in planning for the future needs of the EPF scheme. This includes anticipating demographic changes, economic conditions, and evolving employment patterns to ensure the scheme remains relevant and effective.
Conclusion:
The Central Board of Trustees is pivotal in the administration of the Employees’ Provident Fund under the Code on Social Security, 2020. Its role in governance, investment, benefit administration, and compliance ensures the efficient operation of the EPF, safeguarding the financial security of millions of workers. The Board’s broad representation and inclusive approach also ensure that the interests of all stakeholders are adequately represented and addressed. The structured composition and defined roles ensure streamlined governance of the EPF schemes. Inclusion of representatives from the government, employers, employees, and experts ensures a balanced approach to decision-making. By consolidating administrative functions, the Board aims to enhance the efficiency and effectiveness of social security delivery to employees.
Related Topics:
- Employees Provident Fund Organisation (EPFO) (S. 14 CSS, 2020)
- Employees’ Provident Fund Schemes (Ss. 15 to 23 CSS, 2020)