CS Professional · Labour Laws and Practice · Social Security Legislations
The Employees' Provident Fund Organisation wants to invest surplus Provident Fund money that is not immediately needed for expenses. Under the Code, where must the manner of such investment be specified?
The manner of investment must be specified in the Provident Fund Scheme. The proviso to Section 120(2) says that for Provident, Pension or Insurance Funds, investment, reinvestment or realisation is governed by the relevant Scheme rather than a circular or establishment by-laws.
- AIn the Provident Fund SchemeCorrect
- BOnly in a circular issued by the Commissioner
- CIn the Companies Act rules on investment
- DIn the by-laws of each establishment
Explanation
Section 120(2) allows investment of moneys not immediately required, subject to prescribed conditions, but its proviso says that for a Provident Fund, Pension Fund or Insurance Fund, the investment, reinvestment or realisation must be specified in the relevant Scheme. A circular or establishment by-laws are not the stated source.
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