Provident Fund
20:40
Showing posts with label Provident Fund. Show all posts
Showing posts with label Provident Fund. Show all posts
Tuesday, 9 April 2019
Tuesday, 4 April 2017
SBI
07:46
Merger Of Banks:Dilemma for SBI's associate bank employees
Merger Of Banks:Dilemma for SBI's associate bank employees
COIMBATORE, APRIL 3:
Employees of associate banks of State Bank of India, who probably wanted to work in the parent organisation, particularly those who have over 10 years experience, may reconsider their resolve, primarily because their acceptance of the offer to join State Bank of India would be deemed as “new employment”.
The bank has, in its offer letter, advised the employees to indicate their Terminal Benefit Option of either going with SBI’s Terminal Benefit conditions or preferring to stay put with the superannuation benefit of the respective associate bank.
By opting for the SBI Terminal Benefit, the associate bank employees, who joined service after April 1, 2010 would get the bank’s contribution to Provident Fund from the date of joining SBI, gratuity and Defined Contributory Pension Scheme (DCPS) pension as available to SBI employees.
However, those who choose to continue with the terminal benefits presently available in the respective associate bank, will not be entitled to SBI terminal benefits or any other additional benefits, and facilities available to SBI employees would stand withdrawn from the effective date (April 1, 2017).
The offer letter has also stated that the Special Compensatory Allowance (SCA) and Special Balancing Allowance (SBA) will not be payable to associate bank employees as they would be joining SBI, whereas these allowances are payable to those who were in the service of SBI as on the date of respective settlements (that is July 23, 2003 for SCA and November 1, 2007 for SBA).
Coming down heavily on such discrimination, union sources say “such clauses are unjustified and aimed at throwing people out.”
“We were expecting additional hands post-merger. We are now afraid that many will leave and we will be left with skeletal staff. I foresee the exit of experienced hands, leaving a vacuum in the middle management level,” said Thomas Franco, General Secretary, All India Bank Officers’ Confederation.
Source:URL
Source:URL
Monday, 10 October 2016
withdrawal of amount
19:00
Withdrawing EPF? You don't need your employer's signature anymore
Withdrawing EPF? You don't need your employer's signature anymore
Most employees who have withdrawn their provident fund (PF) amount know what a painful exercise it is. The main reason being your previous employer is required to authenticate the transfer or withdrawal form by attesting it. The process is lengthy, tedious and not employee-friendly. Things, however, are about to change, thanks to the Employees' Provident Fund Organisation (EPFO), which has introduced a new form for all those who have a Universal Account Number (UAN).
To withdraw your money, you may now use 'UAN based Form 19' and in effect bypass the employer signature requirement. This facility will be available to all those subscribers whose UAN is activated and seeded with the KYC details like bank account and Aadhaar number. Currently, the form has to be submitted offline, but the EPFO is expected to extend this facility online too.
So make sure that as an employee, you meet these two conditions for any PF withdrawal in future. But before you withdraw the PF amount, let's look at the implications of withdrawal and the time limit set by the government.
When can an employee withdraw his PF
According to the EPF Act, for claiming final PF settlement, one has to retire from service after attaining 55 years of age. The total EPF balance includes the employee's contribution and that of the employer, along with the accrued interest.
There is, however, a window to partially withdraw the amount for those nearing retirement. Anyone over 54 can withdraw up to 90 per cent of the accumulated balance with interest. But what if someone decides to quit his job before reaching 55? Under the existing rule, the employees, in such cases, can withdraw the full PF balance if he is out of employment for 60 straight days.
There was a proposal which restricted employee access to a part of the funds, allowing for the withdrawal of the employer contribution only after attaining the age of 58 years, which stands in abeyance as of now.
The importance of five years of continuous service
Typically, in early and mid-years of their careers, employees tend to switch jobs. After leaving, they have two options with regard to their PF: they can either withdraw it after waiting for 60 days or transfer the balance to the new employer.
PF withdrawal is not taxable if one has completed at least five years of continuous service. If one has switched jobs in less than five years but transferred the PF to the new employer, it will be counted as continuous service. Someone, for instance, works for 1.5 years and then joins another organisation. He transfers his PF balance to the new employer where he continues to work for 3.5 years. Taken together, it will be five continuous years of service for the employee. It is, therefore, better to transfer your existing PF to your new employer.
Tax on early withdrawals
Withdrawing the PF balance without completing five continuous years of service has tax implications. The total employer's contribution amount along with the interest earned will get taxable in the year of withdrawal. Also, the amount of deduction claimed under Section 80C on one's own contribution will be added to one's income in the year of withdrawal. In addition, the interest earned on one's own contribution will also be subject to tax.
The government had introduced Tax Deducted at Source (TDS) on PF withdrawals to discourage premature withdrawals and promote long-term savings. No tax is deducted if the employee withdraws PF after five years. Also, TDS shall not be applicable in case of PF transfer from one account to another. From June 1, 2016, for TDS, the threshold limit of PF withdrawal has been raised from Rs 30,000 to Rs 50,000. TDS will be applicable at the rate of 10 per cent, provided PAN card is submitted.
However, if one submits Form 15G or 15H, then TDS is not applicable. These forms declare that their income would not be taxable after receiving payment of their PF accumulations from EPFO. While Form 15H is submitted by senior citizens (above 60 years of age), Form 15G is submitted by claimants below 60. However, if a member fails to submit PAN card or Form 15G or 15H, TDS is applicable at the maximum marginal rate of 34.608 per cent of the withdrawn PF amount.
Conclusion
Currently (2015-16), the EPF interest rate stands at 8.8 per cent, marginally up from last year's 8.75 per cent. In terms of returns from a debt instrument, EPF certainly stands tall. The money is sovereign-backed and the interest earned is tax-free. In fact, it enjoys the Exempt, Exempt, Exempt (EEE) status as contributions are deductible from income.
The effective pre-tax yield speaks for itself. For someone in the 10, 20 and 30 per cent tax slab, the effective pre-tax return comes to 9.8, 11.08 and 12.73 per cent respectively. Illustratively, for someone paying 30.9 per cent tax, investing in a 12.73 per cent taxable investment product has a post-tax return of 8.8 per cent per annum. There is hardly any debt product that gives such high return with safety and assurance. Therefore, it's better to transfer your PF amount when you switch jobs and avoid the temptation to withdraw the remaining balance.
Source:BankingUpdates
Monday, 3 October 2016
Reserve Bank of India
15:34
Reserve Bank of India issues circular on Aadhaar usage in banks
Reserve Bank of India issues circular on Aadhaar usage in banks
In an attempt to encourage the use of Aadhaar, the Reserve Bank of India (RBI) said on Thursday that all the banks should ensure that all new card acceptance infrastructure, deployed with effect from 1 January 2017, are also enabled for processing payment transactions using Aadhaar-based biometric authentication.
In 2013, the RBI had advised banks that card infrastructure has to be enabled for both EMV Chip (chip-enabled card acceptance) and PIN (personal identification number) and Aadhaar acceptance. This decision came after the recommendation of a working group established by the central bank, favouring Aadhaar as an effective alternative for additional factor of authentication for domestic transactions, subject to fulfilment of certain conditions.
This move comes after a substantial increase in the number of 12-digit unique identification number holders in the country. Aadhaar card has emerged as probably the world’s largest biometric identification programmes with the Unique Identification Authority of India (UIDAI) issuing nearly 1.05 billion cards. The project was created in order to provide every resident of India with a unique identification number that can be used to access a variety of services and benefits.
All the issues surrounding the scalability and effectiveness of Aadhaar have been addressed, especially after the notification of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, earlier this month.
The government has been aggressively pushing for linking Aadhaar to bank accounts, especially after the Aadhaar Act became a law. Bank branches have been asked to distribute forms, which will link user’s Aadhaar cards with their bank accounts.
Internet banking portals are populated with messages, encouraging the link with simple steps. Special enrolment camps have been planned, which will be set up across branches, stadiums and large public places to encourage the link.
Consequently, the government can now use the unique identification number for identifying beneficiaries of social welfare schemes and disbursing subsidies.
Mandating Aadhaar for getting subsidies has been challenged in the Supreme Court, but the government is of the view that the Act now provides the necessary legal backing to Aadhaar. The court had restricted the use of Aadhaar to the transfer of cooking gas subsidy, the public distribution system, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), all pension schemes, the Employees’ Provident Fund and the Jan Dhan Yojana.
Source:BankingUpdates
Monday, 25 July 2016
Revise rate
07:44
Canara Bank Retired Officers' Association demanded 'Revise pension along with bank salary hike'
Canara Bank Retired Officers' Association demanded 'Revise pension along with bank salary hike'
The Canara Bank Retired Officers' Association on Saturday said it would demand for pension revision every time the bank revises wages. In fact, this is one of the main agendas of the association's 10th biennial conference that is being held in the city. "The All India Banks Officers Confederation has promised to back our demand," said the general secretary of the Canara Bank Retired Officers' Association, K B Ballur. Pointing out that the pension amount wasn't sufficient given the present level of inflation, Ballur said using the provident fund to pay the pension was also unfair. "For example, I retired in 2000 but a person who retires in the same position now gets more than double my pension," he said. "A provident fund is something they deduct from employees' salary and the employer also contributes to it. But, it is the employees' money which ..Read More
Source:TOI
Thursday, 23 June 2016
Provident Fund
09:08
Centre allows premature closure of PPF account
Centre allows premature closure of PPF account
SURABHI PRASAD NEW DELHI, JUNE 20 BUSINESSLINE
Deposit scheme can be closed early for higher education, medical expense In a significant move, the Finance Ministry has allowed subscribers of the
Public Provident Fund (PPF) to prematurely close their accounts after a minimum of five years for reasons such as higher education or expenditure
towards medical treatment.
The Finance Ministry has also retained the interest rates on all small saving products for the second quarter of the fiscal.
On PPF, the Ministry, in a notification, said, the subscribers can close the account if “the amount is required for serious ailments or life threatening
diseases of the accountholder, spouse, dependent children or parents…or the amount is needed for higher education of the account holder or the minor account holder.” It further added that supporting documents and bills will have to be produced. But such subscribers will get one per cent interest less than other accounts.
For instance, instead of an interest of the current 8.1 per cent, a subscriber who chooses to prematurely close his PPF account would earn interest of 7.1
per cent on the deposit. At present, withdrawals from the PPF account are allowed after seven years of opening the account. But it is only up to 50 percent of the total deposit till the end of the fourth year. The account matures after 15 years, when full withdrawal is permitted.
Interest rate
“On the basis of the decision of the government, interest rates for small savings schemes are to be notified on quarterly basis,” said the Ministry on Monday.
The return on PPF is maintained at 8.1 per cent in the July-September quarter, the same as that in the quarter ending June 30, 2016.
Similarly, the interest rate on the Kisan Vikas Patra has been maintained at 7.8 per cent for a maturity of 110 months, while the return on the five-year National Savings Certificate is 8.1 per cent. The government has moved to a quarterly reset of interest rates on small savings beginning this fiscal. Under the new mechanism, returns on these products are aligned with the market rates of the relevant
Source:AIBEA
Tuesday, 17 May 2016
Provident Fund
08:29
EPFO to provide 3-year life cover to subscribers after job loss
EPFO to provide 3-year life cover to subscribers after job loss
Retirement fund body EPFO next month is likely to consider and approve a proposal to provide life insurance cover to its subscribers for three years after cessation of employment .
"EPFO trustees, in the meeting expected next month, will take up and consider the proposal to provide insurance cover under its EDLI scheme to its subscribers for three years after losing job," a source said.
"The maximum sum assured under the Employees' Deposit Linked Scheme (EDLI) will soon be enhanced to Rs 6 lakh this month," the source said.
In September last, the Employee Provident Fund Organisation's apex decision making body Central Board of Trustees' (CBT) had decided to increase benefits under the EDLI scheme from Rs 3.6 lakh to Rs 6 lakh.
However, the decision could not be implemented because the notification to amend the scheme was not issued as it was stuck in law ministry.
The source said, "The notification will be issued this month only to enhance the benefits under EDLI to Rs 6 lakh."
The proposal provides for voluntary retention of EDLI membership to subscribers at reduced rate of contribution for three years after losing job.
The employers are required to pay 0.5 per cent of basic wages of workers as premium for the insurance scheme for their workers. Workers usually lose membership or benefit of the scheme after quiting job.
EPFO manages a corpus of over Rs 8.5 lakh crore and its subscribers' base is over five crore at present.
Source:BankingUpdates
Wednesday, 27 April 2016
Provident Fund
08:09
Government cuts EPF interest rate to 8.70% during 2015-16, sparks protest
Government cuts EPF interest rate to 8.70% during 2015-16, sparks protest
The government has decided to lower the interest for five crore Employees' Provident Fund subscribers to 8.70% in 2015-16, from 8.75% a year ago. The rate is lower than the 8.80% recommended by the EPF Organisation's board and has triggered protests by unions, including RSS backed Bharatiya Mazdoor Sangh, which has announced nationwide protests on Wednesday.
EPFO's finance committee had recommended an interest rate of 8.95% but the board, headed by the labour minister, settled for 8.80% before the finance ministry brought it down to 8.70%. The finance ministry defended the move, saying the lower payout was needed as EPFO would pay interest on inactive accounts from April. The Centre on Monday decided to lower the interest for Employees' Provident Fund (EPF) subscribers to 8.70% during 2015-16, sparking protests from unions.
When the finance ministry said that the lower payout was essential as EPFO will pay interest on inactive accounts from April, the unions countered this argument saying that the payment on the inert accounts was to be made from the current financial year while the interest rate for last year was determined on the basis of the income and surplus for 2015-16.
EPFO had a distributable surplus of Rs 34,844 crore during the year and interest rate of 8.7% would leave the retirement savings agency with a surplus of Rs 870 crore. At 8.8%, the surplus would have been around Rs 674 crore and even after paying 8.95%, the entity would have been left with Rs 91 crore, said Prabhakar Banasure, the BMS representative on the EPFO.
The lower rate is in line with the finance ministry's attempts to ensure that savings and deposits fetch lower returns so that bank lending rates could be lowered. It has already announced a steep reduction in interest rate on small savings schemes such as public provident fund and Kisan Vikas Patras for the AprilJune quarter.
The latest decision, coming after two aborted attempts to "reform" EPFO, has evoked strong response from trade unions. Last month, the government was forced to drop its plan to tax withdrawals at the time of retirement if a part of the corpus was not used to buy pension plans. Last week, it had to cancel an order that mandated that the entire corpus could not be withdrawn until a subscriber turned 58 years. An official said this was probably the first time that the finance ministry had opted to lower the rates, ignoring the recommendations of the EPFO board of trustees, headed by the labour minister.
In fact, the finance ministry ignored an assurance given by Dattatreya that the interest rate would not be lower than the interim rate of 8.8% recommended by the EPFO board.
Source:BankingUpdates
Thursday, 24 March 2016
State Bank of India
22:50
People over 45 should get a higher PPF interest rate, says SBI report
People over 45 should get a higher PPF interest rate, says SBI report
The State Bank of India has suggested that instead of cutting the interest rate on the Public Provident Fund (PPF), the Centre should have tweaked it according to investors’ age.
The ideal approach would be to immediately shift to an age-wise interest rate structure, with a higher than market rate for those over 45, and rates linked to long-term bank deposit rates for those under 45, said a research report by the bank.
Further, the interest rate on the Sukanya Samriddhi account should have been left untouched, given its social objective of protecting the girl child, the report added.
The Centre on Friday cut interest rates on small savings schemes by 60-130 basis points with effect from April 1.
The new interest rate on the hugely popular Public Provident Fund (PPF) scheme will be 8.1 per cent (against 8.7 per cent now). For the Sukanya Samriddhi scheme, the interest rate will be 8.60 per cent (9.20 per cent).
In its ‘Ecowrap’ research report, India’s largest bank said an age-wise interest rate structure would ensure a lower lending rate structure (in the economy), adequate returns for senior citizens, lower interest expenditure and run for at least 15 years.
‘Remove lock-in period’
As the interest rate on small savings schemes will be reset every quarter, the report said the Centre should ideally remove the current 15-year lock-in period for PPF and give investors the option to withdraw their money within a stipulated time.
Furthermore, the Centre could introduce some variant of a pension-linked annuity scheme and may also look at creating some common ground between its flagship Sukanya Samriddhi Scheme and the PPF scheme.
Towards social security
The report expects the Centre to maintain parity in interest rates between the organised sector/EPF and the unorganised/PPF for the larger goal of social security.
Studies conducted by SBI’s economic research department on PPF accounts show that such accounts from urban and metro areas are almost 2.5 times higher than rural and semi-urban accounts. Hence, such accounts may be used more for tax savings.
An analysis of the spending patterns of individuals with investments in PPF showed that those who are in the lowest quintile of income distribution want to invest more by stretching the number of payments in a year.
An exactly opposite trend is evident among people with higher income and spending. Such people tend to invest less over time as their objective is to save on tax.
Source:BankingUpdates
Source:BankingUpdates
Wednesday, 9 March 2016
Provident Fund
09:37
Government rolls back proposal to Tax Provident Fund
Government rolls back proposal to Tax Provident Fund
New Delhi, Mar 8 (PTI) In the face of all round attack, Finance Minister Arun Jaitley today completely rolled back the controversial proposal to tax the employees' provident fund (EPF) at the time of withdrawal.
Taking the first opportunity available, he made a suo motu statement in the Lok Sabha in which he also announced withdrawal of imposing monetary limit for contribution of employers to provident and superannuation fund of Rs 1.5 lakh for taking tax benefit.
Jaitley, however, left untouched the proposal tax exempt 40 per cent of National Pension Scheme and services provided by EPFO to employees.
"In view of the representations received, the government would like to do comprehensive review of this proposal and therefore I withdraw the proposals in para 138 and 139 on my budget speech. The proposal of 40 per cent exemption given to NPS subscribers at the time of withdrawal remains," the Minister said.
Source:PTINEWS
Wednesday, 17 February 2016
Provident Fund
09:11
PF interest rate hiked to 8.8% for 2015-16 from existing 8.75%
PF interest rate hiked to 8.8% for 2015-16 from existing 8.75%
The employees’ provident fund will earn a higher interest rate of 8.8% for 2015-16, marginally up from the existing 8.75%.
There has been demand to hike the PF interest rate to 8.90%.
Union Labour minister Bandaru Dattatreya said the hike is an ‘interim one’ and indicated that it could be further revised later.
There is global slowdown and interest rates in India are also coming down, the minister said, adding that the Reserve Bank of India and other central government organisations are monitoring the market trends.
“We had last time given 8.75% and this time, seeing the situation, we are declaring 8.8% for the workers,” he told reporters after chairing the 211th meeting of the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO).
While trade unions had demanded that the interest rate be fixed at 8.90%, the government had revised it to 8.80%, he said, underlining the Centre’s commitment to the working class.
“That is our motto. We don’t want to have a backward outlook. We want a forward outlook. We want to safeguard the workers’ interest. We want to give a real and purposeful picture before the workers and that is why a long debate took place today,” he said.
On trade unions’ demand for 8.9% interest rate, he said, if that was implemented, the ‘surplus’ the government will have would be Rs 285 crore. And in the case of 8.8%, the surplus will be Rs 673 crore, he explained.
Thursday, 11 February 2016
Provident Fund
11:14
Retirement fund body EPFO may announce 9 per cent interest rate on PF deposits for 2015-16
Retirement fund body EPFO may announce 9 per cent interest rate on PF deposits for 2015-16
EPFO likely to announce 9% interest on PF deposits on February 16
Retirement fund body EPFO may announce 9 per cent interest rate on PF deposits for 2015-16 in its trustees' meet on February 16, higher than 8.75 per cent provided in previous two financial years.
"The 211th meeting of the Central Board of Trustees (CBT) has been scheduled to be held on February 16, 2016 in Chennai," an EPFO circular stated.
According to the circular, the issues to be placed for consideration of the CBT include rate of interest to be credited to EPFO members' account for the year 2015-16, cadre restructuring of the body and annual accounts in respect of EPF Scheme 1952, EPS 1995 and EDLI Scheme 1976 for the year 2014-15.
Earlier, the Employees' Provident Fund Organisation's (EPFO) advisory body had recommended 8.95 per cent rate of interest for the current fiscal which is higher than 8.75 per cent provided in 2013-14 and 2015-16.
According to EPFO income projections worked out in September, providing 9 per cent interest on PF will result in a deficit of Rs 100 crore.
"We are expecting that there will be a surplus of Rs 100 crore on providing 9 per cent rate of interest on PF deposits when EPFO will work out the latest estimates. FAIC can change its recommendation in the next meeting and suggest 9 per cent interest rate for 2015-16," a CBT and FAIC member P J Banasure had told PTI earlier.
The proposal has to be endorsed by the Central Board of Trustees (CBT) before the Finance Ministry notifies it.
However, there has been indications from the Finance Ministry that it will slash interest rate on small savings like public provident fund in view of the rate cut by Reserve Bank of India.
The EPFO provides rate of interest from the earning on investments of formal sector workers' funds without any assistance from the government.
Thus, the workers' representative are of the view that if there is no deficit on providing 9 per cent rate of interest for the current fiscal, then government should not have any issue with it.
Source:BankingUpdates
Thursday, 28 January 2016
Provident Fund
06:33
EPFO withdraws five-day grace period for #PF contribution
EPFO withdraws five-day grace period for #PF contribution
Remitting the contribution of provident fund within the 15th of every month has been made mandatory by Employees Provident Fund Organisation (EPFO).
“The provision of grace period of five days has been withdrawn with effect from February 2016. As such employers/companies will have to remit the provident fund contribution within 15th of every month, (January contribution payable by February 15) to avoid penalty,” M. Ravi, Assistant Provident Fund Commissioner, Ballari Sub-Regional Office, told presspersons on Monday.
He also informed that remitting the contribution through online (#NEFT) has also been made compulsory and appealed to the companies/employees to adhere to it with immediate effect.
Mr. Ravi informed that these were some of the new initiatives of EPFO as part of the ongoing Digital India programme. He said that Universal Account Number (#UAN) has been made compulsory for withdrawal of provident fund dues and redressal of grievances.
Provident Fund
06:32
Provident Fund Account handling made simpler
Provident Fund Account handling made simpler
With Employees’ Provident Fund Organisation shifting to electronic mode of payment and employers making remittances through internet banking, the time taken for calculation of PF dues and remittances has been reduced, leading to the cancellation of concession of five days grace period, officials said.
Speaking to reporters on Monday, Regional PF Commissioner-II and officer in-charge Tambaram #EPFO Regional Office, S. Murugavel said that with effect from January 1, digital signatures have been made mandatory for all employers.
“Universal Account Number is the latest initiative which is a unique 12-digit number to all subscribers of the fund which can be utilised to view their account passbook, file requests for transfer of PF accumulations from their previous accounts to present accounts,” he said.
“Employees whose details like #Aadhaar number and bank account number have been seeded in their #UAN may submit claims in Form 19, Form-10C and Form 31 directly to the respective provident fund commissioners without attestation of their employers for fast settlement of claims,” he said.
He also added that a mobile app is available that can be downloaded from the EPFO website - www.epfindia.gov.in (or) Google playstore with which the members can activate their UAN accounts
Sunday, 12 July 2015
withdrawal of amount
19:40
Govt may cap premature PF withdrawals at 75%
Govt may cap premature PF withdrawals at 75%
The government is looking to cap premature provident fund withdrawals at 75 per cent for EPFO subscribers at any given time till the age of 58.
Under the existing provisions, Employees Provident Fund Organisation (EPFO) subscribers can withdraw the entire amount by showing not employed anywhere for two months.
The proposal regarding changes in 'The Employees' Provident Fund Scheme' has been sent to the Labour Ministry for approval.
"We will take a decision in this regard in the next 10-15 days," Labour Secretary Shankar Aggarwal said.
Central Provident Fund Commissioner K K Jalan also said the proposed changes are likely to be notified in the next 10-15 days, as it has got the backing of employee unions.
Asked whether the 75 per cent withdrawal ceiling has been proposed for even circumstances like constructing a house, marriage, children's education, etc, Jalan replied in the affirmative.
The idea behind the proposal, he said, is to ensure that provident fund is used as an old-age security and not misused for purposes other than it was meant to be.
The provident fund money, he said, should be used as an old-age security scheme and not like a savings bank account.
Jalan added the EPFO plans to gradually further cap the withdrawal limit to up to 50 per cent and also put a ceiling on the number of withdrawals by a subscriber.
"Presently, out of the 1.3 crore annual claims, not less than 65 lakh claims are for full withdrawal. If the proposal is implemented by the Centre, the total number of claims would come down to 50 lakh," Jalan said.
Elaborating on the rationale behind the 75 per cent cap proposed, he pointed out that the contribution of an employer including interest, in any case, does not exceed more than 75 per cent of the total contribution.
