New Delhi: The Employees’ Provident Fund Organisation (EPFO), the country’s statutory retirement fund manager, has asked the Bajaj Allianz Life Insurance company to pay a default amount of ₹121 crore towards provident fund (PF) contributions within 60 days, concluding a long-drawn-out investigation, according to an order seen by HT.
The EPFO’s regional provident fund commissioner—deciding a case between the EPFO (through its enforcement officer) versus Bajaj Allianz Life Insurance Co. Ltd, Pune—held that the insurance major had split up salary components into various perks to “avoid” paying provident fund dues. These allowances qualified as “universally paid allowance” and therefore were part of basic pay on which provident fund contributions by an employer are to be calculated, the order added.
“The respondent is held in default remittance of an amount of ₹1,21,04,57,803 for the period of 09/2014 to 08/2019 as per the following distribution…,” the order issued on November 27 stated.
Under the Provident Funds and Miscellaneous Provisions Act, an employer and worker both are required to contribute 12% of a person’s basic salary towards a retirement-benefits corpus managed by the EPFO.
The insurance firm had failed to remit provident fund dues on “conveyance allowance”, “other allowance” and “professional allowance”, on an effective wage ceiling of ₹15000, the order said.
What Bajaj Allianz said
The insurance company in its submission, as stated in the order, said following a Supreme Court verdict, it had “subsumed” these allowances in basic wages and therefore the non-payment of provident fund dues on its part was not “intentional”.
The EPFO disagreed with the insurance company’s contention that these allowances did not count as basic pay. The HT reached out to Bajaj Allianz Life Insurance company for its comments. The firm has not yet responded.
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“The case of the enforcement officer, therefore, is that the respondent kept a bare minimum amount as basic wages and splitted (sic) the remuneration of the employees into various allowances only to avoid the statutory compliances including that of provident fund,” the order said.
The EPFO order also stated that the salary sheet submitted by the respondent (Bajaj Allianz Life Insurance) did not correspond to its annual accounts of profits and losses. The EPFO commissioner also ruled that unremitted dues stemmed from five counts of payable amounts, which, with interests, total a staggering ₹122.13 crore.
