EPFO takes away ‘suspense’ from interest account
Retirement fund body EPFO Wednesday decided to rename `Interest Suspense Account` as `Interest Account`, a step to clear the ambiguity over whether it is a regular account or not.
New Delhi: Retirement fund body EPFO Wednesday decided to rename `Interest Suspense Account` as `Interest Account`, a step to clear the ambiguity over whether it is a regular account or not.
"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 was 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 report that the said amount was not verifiable because subscribers` accounts were not updated.
The controversy arose 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 percent 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 feasible.
However, the finance ministry on March 17 ratified the 9.5 percent 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.