RE: Legal Opinion regarding interpretation of Bank 1 Staff Provident Fund Deed of Trust Rules.
We refer to your letter dated 4 December 2006 on the same subject.
From perusal of your letter it appears that BANK 1 Staff Provident Fund was recognized and approved by the National Board of Revenue with effect from 31 December 1997.
The Bank practice in case of members’ interest calculation is: members’ are entitled for interest if they have served a full year (January – December). Mid year joiner/leavers of the provident fund are not entitled to this interest.
Now you seek our legal opinion as to whether the above interpretation of BANK 1 Staff Provident Fund Deed of Trust Rules are correct.
On perusal of the Trust Deed Rules, we are of the opinion that the interpretation followed by bank practice is not correct.
According to Clause 10 (e) of the Schedule to BANK 1 Staff Provident Fund Deed of Trust Rules, the amount at the credit (which includes the entitled interest of the member) of the resigning, retiring or deceased member of the Provident Fund has to be calculated up to the 31st day of December if the membership is terminated on that day, and in any other case up to the 31st day of December preceding the date of termination of membership. BUT provided that any member who is dismissed or resigns with less then 5 years service will not receive any portion of the Banks contribution or interest.
We will use your example to illustrate the issue:
Mr. X joined the Staff Provident Fund Scheme on February 2004 and left BANK 1 on November 2006.
According to the Trust Deed Rules, Mr. X will be entitled to interest from February 2004 to 31 December 2005 (provided that he had been in service of BANK 1 for more than 5 years).
If you have any further query, please do not hesitate to contact the undersigned.
For: “The Lawyers & Jurists”