EPFO asks Bajaj Allianz Life Insurance to pay Rs 121 crore in default

New Delhi: The Employees’ Provident Fund Organization (EPFO), the country’s statutory pension fund manager, has asked life insurance company Bajaj Allianz to pay a default sum of ₹121 million for provident fund (PF) contributions within 60 days, ending a long-running investigation, according to an order seen by HT.

EPFO Regional Provident Fund Commissioner – Adjudicating a case between EPFO (through its enforcement officer) and Bajaj Allianz Life Insurance Co. Ltd, Pune – held that the insurance principal had split the salary components into various benefits to “avoid” paying the provident fund. contributions. These allowances were qualified as “universally paid allowance” and therefore formed part of the basic salary against which an employer’s provident fund contributions must be calculated, the order added.

“The respondent is held responsible for the remittance of an amount of ₹1,21,04,57,803 for the period 09/2014 – 08/2019 according to the following distribution…”, the order issued on November 27 states.

Under the Provident Fund Act and various provisions, an employer and an employee have to contribute 12% of a person’s basic salary to a pension benefit corpus managed by the EPFO.

The insurance company has not remitted the contributions to the provident fund for “transportation allowance”, “other allowance” and “professional allowance”, at an effective salary ceiling of ₹15,000, the order said.

What Bajaj Allianz said

The insurance company in its submission, as mentioned in the order, stated, following a Supreme Court verdict, that it had “subsumed” these allowances in the basic salary and hence non-payment of insurance fund contributions on its part it was not “on purpose”.

EPFO disagreed with the insurance company’s contention that these allowances were not considered as basic pay. HT has contacted Bajaj Allianz Life Insurance for its comments. The company has not yet responded.

“The executor’s case, therefore, is that the respondent kept a strict minimum amount as basic salary and divided (sic) the remuneration of the employees into various allowances only to avoid statutory compliances including that of the insurance fund,” the order stated. said.

The EPFO order also stated that the salary slip submitted by the respondent (Bajaj Allianz Life Insurance) did not match its annual profit and loss accounts. The EPFO commissioner also ruled that the unremitted dues came out of five amounts payable which, along with interest, add up to a staggering amount. ₹122.13 million euros.