I was a full-time employee with an organization that I left in October 2016. It has a private provident fund (PF) trust. Due to some reasons, my new employer did not send the PF transfer request to the employer. My previous organization agreed to transfer the PF balance in January 2018; however, it is crediting only 90 days’ interest from October 2016, though the PF balance was with them for the entire tenure. Please guide how to get the interest amount.
PF, whether held in a private Trust or with the Employees’ Provident Fund Organisation (EPFO), is governed by rules and conditions of the Employees’ Provident Funds and Miscellaneous Provisions Act,1952. The workings of private Trusts are similar to those run by the EPF, and interest rates are also similar.
PF accumulations with previous employer can be transferred by filling Form13. And as per the procedure, the current employer is supposed to send the forms to the previous employer duly endorsed. As an employee, you should have followed up, especially when the PF was not transferred and was not reflecting in your annual PF statement (which would have received at the start of FY 2017-18), and this matter should have been brought up with the old or current employer, whoever was at fault. At the same time, this cannot be treated as any reason of excuse for non-payment of interest by the old employer. You need to first reach out to your old employer and check the reasons of non-payment of interest. And if the issue is not resolved, you need to go to the EPFi Grievance Management System website (www.epfigms.gov.in) and fill the required fields to lodge your complaint.
I need help in investing Rs45 lakh for my 80-years-old grandfather. He lives with my grandmother in a rented house, paying Rs15,000 a month. He is a pensioner who gets Rs27,000 per month. In my view he should invest Rs15 lakh in Senior Citizen Savings Scheme (SCSS). However, I don’t know what to do with the rest of the amount. He has recurring medical expenses.
You need to ensure that your grandparents have enough regular income to take care of their daily expenditure, including medical expenses and rent. Besides the pension income, part of the corpus can be invested in SCSS. The maximum investment limit is Rs15 lakh, whether held individually or jointly. Hence you can invest up to Rs30 lakh—Rs15 lakh each for your grandfather and your grandmother. The interest rate offered by the deposit is 8.3% now, payable quarterly. The only negative is that it has lock-in of 5 years, and does not offer premature withdrawal before 1 year. And even after that, premature closure can cost you between 1-1.5% (depending on when you redeem it before maturity). However, you can go with SCSS deposits, as you have enough surpluses in, in case there is need of funds in the near future. The balance Rs15 lakh can be invested in mutual funds, where you can consider short-term debt mutual funds. You can also consider hybrid equity funds, popularly called balanced funds, which invest 65% or more in equity. Based on the expected income, you can also start withdrawing the money using a systematic withdrawal plan (SWP).
I have over 2 acres of land. I am planning to give it to a builder who will build six villas on it, give one to me for free and also 40% of the proceeds from the sale of the other five villas. So, I will have a house of my own plus about Rs1.5-2 crore from the builder. If I sell the land directly, I’ll get about Rs80 lakh. Is this a good deal? If yes, how should I invest this sum?
Prima facie this looks like a good idea to give your land, which is currently valued at Rs80 lakh, for being converted in a new house with 1/6th of the ownership of the land still being retained by you and also earning you another Rs1.5-2 crore. Once you receive such funds, you need to decide the need of this corpus—do you need a regular income or can you invest this for the long term? Also, you should assess your risk profile. Prefer to go for mutual funds, where you can build a combination of debt and equity and within debt you can have short-term as well as long-term debt portfolio. And for equity, a mix of large-cap, multi-cap, mid-caps and even balanced funds should form your portfolio.
Surya Bhatia is managing partner of Asset Managers. Queries and views at firstname.lastname@example.org.