June 05, 2024
Dear All,
As you know, BCH has been managing the PF contribution of all employees in Executive Cadre through a separate Trust created for the purpose under the name of “Cutler Hammer Provident Fund Trust”. All the monthly employees’ and employer’s contribution as well as the accumulations thereof are being managed by the Trust as on till date. For managing the PF Fund through separate Trust (instead of it being managed by EPFO), BCH was granted special exemption from Ministry of Labour, Haryana Government under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 read with the Scheme.
Going forward, for the reasons mentioned hereinafter, the management has decided to surrender the above exemption granted to BCH Electric Limited. Along with the surrender of the exemption, the whole PF fund accumulations/ corpus will be transferred to EPFO (Employees’ Provident Fund Organisation) including the further contributions in future.
Effective 1st July, 2024 onwards, Regional PF Office, Faridabad, which used to maintain Employees’ Pension Scheme (EPS) for all BCH employees, will be the custodian of past and future PF accumulations of the employees and the management thereof.
Genesis of surrendering PF Trust exemption
In the past, forming trust was a very viable option, as:
- Both serving and ex-Employees were extended prompt service on their PF related issues and
- Trust/s used to garner better investment returns as compared to Employees’ Provident Fund Organisation (EPFO)
Over the years especially after introduction of UAN (Universal Account Number), service levels of EPFO have become more employees friendly, whereby employees who have updated their KYC and carry an activated UAN, can enjoy online services offered by EPFO for both PF and Pension – this includes view of PF statement, partial withdrawals for housing, education, pandemic, and other reasons, personal data corrections, settlement or PF transfer on separation, etc.
On the contrary, exempted Trust/s are facing challenges to match year on year returns on fresh PF investments with EPFO declared interest rates. Lack of quality investments, default by corporates in repayment of redemptions/due interest are few to quote, thereby managing trust has become very challenging due to frequent changes in the financial market dynamics.
To leverage enhanced services provided by the EPFO, the Management has decided to surrender the exemption granted to its EPF trust and move the funds to Regional PF Office, Faridabad under whose jurisdiction PF compliances are reported.Based on application for surrender of exemption filed by BCH Electric Limited, establishment intends to comply as un-exempted establishment effective from July 01, 2024.
After the cut-off date, the past accumulated EPF balance standing to the credit of the employees in the EPF Trusts would be transferred to EPFO. The monthly PF contributions from 1st July, 2024 onwards would be deposited by BCH with RPFC Faridabad, it would be status quo for Employees Pension Scheme.
Process and timeline for transfer of member balances
Based on our initial discussions with RPFC Faridabad, we understand that:
- The entire process for transfer of past member balances to RPFC could take an estimated period of 6 ~ 9 months from the cut-off date.
- During the said transition period, employees would not be able to apply for advances, transfer-ins, transfer-outs or withdrawal.
- The employees would be able to view their PF passbook for the contributions deducted from their salaries of July 24 onwards in EPFO portal, but past accumulations will be available after the transfer process is completed, thereafter employees can initiate all transactions related to advances, transfer- ins, transfer-outs or withdrawal.
Prudent advisory for employees
In view of the estimated transition timelines, employees are requested to strictly note the
following timelines and action points:
- Request for PF advance/ withdrawal: PF advance / withdrawal applications received till June 28, 2024 will be approved by the EPF Trust and processed. However, PF advance / withdrawal requests post the said date, would need to be raised in online EPFO portal once the transition of Exempted Trust to EPFO gets completed.
Effective July 01, 2024, the transfer process will be initiated, and the Trust will not be able to process any applications due to accounting closure and member balance reconciliation related activities to be initiated.
The RPFC will accept and process such applications after the transfer period. - Request for PF transfer-out: Transfer-out applications received till June 30, 2024 for separated / separating employees will be approved by the EPF Trust. However, transfer-out requests post the said date, would need to be made with RPFC once the process for transfer of member details are completed.
- Request for PF transfer-in: Employees who have not yet submitted the request for transfer-in of accumulated balance from previous employer are advised to submit the same with the EPFO post completion of the transfer process. The transfer-in request would be submitted on the EPFO’ unified portal/ EPF Trust belonging to previous employer. In view of the activities related to reconciling member balances, EPF Trust would not be able to accept any request for transfer- in.
- Completion of Aadhaar-UAN linking, eKYC: All employees are advised to complete their Aadhaar-UAN linking and eKYC on an immediate basis. In case of failure to do so, the accumulated balance till cut-off date will not be transferred to employee’s account with EPFO and the same shall not be reflected in your PF passbook. Also, in absence of Aadhaar-UAN linking, the Company will not be able to deposit monthly EPF and EPS contributions with the EPFO post the cut-off date.
- e-Nomination on EPFO portal: All employees are advised to check the e- nomination status on the EPFO portal and complete the same.
- Accumulated Balance statement: Members are advised to connect at time_office@bchindia.com to download the complete annual accumulated balance statement. Please note that the annual statement for contributions up to cut-off date will not be available on the EPFO portal.
Please refer to the FAQs attached with this communication which provides the explanation for various aspects related to the surrender of EPF Trust.
For any queries related to the process of surrender of EPF Trust only, employees may reach out to our team on time_office@bchindia.com.
We would like to assure our members of all support to ensure that employee queries and concerns are addressed in a timely manner and the disruption is minimised to the extent possible.
However, given this is a statutory process and our dependencies with the regulatory authorities, we request members to extend their support through this process, including in timely completion of critical activities like Aadhaar-UAN linking and eKYC, which will help in the completion of the overall transition process.
Annexures for UAN activation, KYC updation and E-nomination process.pdf
BCH Limited FAQs for surrender of EPF Trust exemption.pdf
In case of any query, you may contact Mr. Himanshu Sharma at himanshu_sharma@bchindia.com / 9457035032.
