Interest rate on PF deposits increased to 8.65% from 8.55% for the FY 2018-19.
EPFO (Employees’ Provident Fund Organization) is a statutory body incepted by the government of India. Country’s largest social security organization, it mainly encourages people to save for retirement, among others. EPFO comes under the purview of Ministry of Labor and Employment and came into being in 1951. This article explores the role of EPFO in uplifting the social security system in India and how they go about it.
In this article we cover the following
- EPF and applicabilty
- EPFO Functions
- Services offered
1. EPF and applicabilty
The Constitution of India under ‘Directive Principles of State Policy’ provides that the State shall within the limits of its economic capacity make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old-age, sickness & disablement and undeserved want. In conformity of the spirit of this Direction, the need for a vigorous social security cover in the changing environment resulted in the legislation for provident fund as an endeavour to provide a life of dignity for the employees and their dependents once they ceased to earn their normal livelihood.
The Employees’ Provident Fund came into existence with the enactment of the Employees’ Provident Funds (EPF) Ordinance in 1951. EPF Ordinance was later replaced by the EPF Funds Act, 1952. The EPF Bill was introduced in the parliament in 1952 to provide for provident funds for employees in factories and other establishments. Law that governs employees’ provident fund is now referred as the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 (also called The Act). The Act has its applicability all over India except Jammu and Kashmir.
The Act and all its Schemes are administered by a tri-partite Board called Central Board of Trustees (EPF). It has representatives of Government (both Central and State), Employers and Employees. The Board is chaired by the Ministry of Labour and Employment, Government of India.
The Central Board of Trustees (EPF) operates 3 schemes:
a. The Employees’ Provident Funds Scheme 1952 (EPF)
b. The Employees’ Pension Scheme 1995 (EPS)
c. The Employees’ Deposit Linked Insurance Scheme 1976 (EDLI)
The EPF Organisation (EPFO), is an Organization that is established to assist the Central Board of Trustees (EPF) and is under the administrative control of the Ministry of Labour and Employment, Government of India.
3. EPFO Functions
EPFO assists the Central Board of Trustees (EPF) in the administration of Provident Fund Scheme, a Pension Scheme and an Insurance Scheme for the registered establishments in India and includes employees of such establishments and international workers who are covered. EPFO’s functioning includes enforcement of the Act across the country (except Jammu and Kashmir), maintenance of individual accounts, settlement of claims, investment of funds, ensuring prompt pension payment and updating records etc.
EPF Organization is also the nodal agency for implementing Bilateral Social Security Agreements with other countries. Further, it is one of the largest social security organizations in India, both in terms of the beneficiary base and the quantum of financial transactions undertaken. The EPFO’s apex decision making body is the Central Board of Trustees.
EPFO has been taking several measures to simplify the operation of EPF account both for employer and employees by adopting IT-enabled tools and techniques. EPFO has undertaken the number of digital initiatives in the recent past.
Overall, the EPFO performs the dual role of being the administration and overseeing the implementation of the Act and also as a service provider for the covered beneficiaries which includes both employers and employees i.e., members.
EPFO’s website which provides access to various information and online services can be accessed here
4. Services offered
Universal Account Number
EPFO introduced UAN which acts as an umbrella for the multiple Member Ids allotted to an individual by different employers. The UAN programme was launched in October 2014 as part of Pandit Deen Dayal Upadhyay Shramev Jayate Karyakaram. It is perhaps the most exceptional step taken by EPFO in the recent past. UAN is a unique 12 digit number assigned to an employee by EPFO. UAN enables linking of multiple EPF Accounts (Member Id) allotted to a single member. UAN offers bouquet of services like dynamically updated UAN card, updated PF passbook including all transfer-in details, facility to link previous members’ ID with present ID, monthly SMS regarding credit of contribution in PF account and facility for auto-triggering transfer request on cange of employment.
Employees are required to activate their UAN at UAN portal in order to avail wide range of online services offered by EPFO. Once UAN is activated, employees can login using UAN and password and access various online services as well as update KYC details etc.
UAN Member E-Sewa for Employees
The e-sewa service has been provided for in the member portal to the employees who can register for this service using their UAN. This will help employees avail themselves of various facilities like UAN Card download, KYC Information online updation, receiving EPF account Passbook linked to UAN etc.
Inoperative Accounts Online Helpdesk
Inoperative Accounts Online Helpdesk on EPFO website setup in February 2015 has made tracking of old or dormant Inoperative EPF accounts (no contributions received for 36 months) that does not receive any further interest, easy. It helps EPF members track their old Inoperative PF accounts, settle them or get them transferred to present account by providing base minimum details such as details of his / her previous employment to the extent known along with personal details.
Online EPF transfer
While the PF transfer was possible online earlier under ‘Online Transfer Claim Portal’, with the introduction of UAN, the process of transfer is revised and shifted under ‘unified portal’. This has made PF transfer from one account to another easy, paper-free and also hassle free. Refer our article on PF transfer online – Forms and procedure.
Online PF withdrawal
Employee is allowed to withdraw PF if he/she is not employed for 60 days post resigning the previous employment. EPFO has enabled online PF withdrawal with simple procedures for UAN linked with Aadhar. Refer our article on PF withdrawal
Online Registration of Establishments (OLRE)
Has made registration of establishment with EPFO web based. PF code allotment letter is also made available online and benefitting more and more employees.
PF payments online
It has been made mandatory for all establishments to make payment of PF online. Presently EPFO has tie-up arrangement with 10 banks to collect EPFO dues and banks are SBI, PNB, Indian Bank, Allahabad Bank, Union Bank of India, Bank of Baroda, HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank. Refer our article on PF payment online for detailed explanation regarding this.
Centralised software for generation of Certificate of Coverage for international workers
EPFO has launched an online form through centralized software to generate Certificate of Coverage (CoC) to EPF members working in countries having Social Security Agreements with India.
SMS service / Alerts and Missed Call Service
Was also launched which could be accessed by PF members who have activated their UAN. Members can access details of KYC status, last contribution, total PF balance etc by sending SMS in the format EPFOHO UAN followed by first three characters of the preferred language to a number 7738299899. Members can also obtain details by giving missed call to number 011-22901406.
SMS alerts are also being sent to members intimating remittance, withdrawals, interest credit etc. Also, SMS is sent to employers for non deposit of dues.
Electronic return for the exempted establishment – Adoption of IT tool
Has made the process of submitting the monthly return by exempted establishments easier and hassle-free.
Passbook and claim status
Members can view their passbook, check their claim status etc as well. Members can also update/modify basic KYC details online.
Members/employers can also raise complaint with respect to pf withdrawal, PF transfer, pension settlement etc online.
This grievance redressal was accorded top most priority and as a result, about 80% of grievances are pending within 7 days and 97% of grievances are pending within 15 days only. By systematic monitoring at the head office level, the pendency has drastically come down from 20,000 grievances to only 2000-3000 grievances on any given day which is a minuscule figure when seen against the 15 crore accounts being handled by EPFO.
Various circulars issued by EPFO till date can be accessed here
Recently, there have been circulars on the declaration of the rate of interest for members on their PF account for FY 2017-18, Coverage of non-enrolled contract/casual employees in respect of Indian Railways etc
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