EPFO, Employee Provident Fund Organization – What is EPFO, Structure, Services & Latest Updates

Employees’ Provident Fund Organization (EPFO) is a statutory body incepted by the government of India. Being the country’s largest social security organization, it mainly encourages people to save for retirement, among others. EPFO comes under the purview of the Ministry of Labour and Employment and was established in 1951.

This article explores the role of EPFO in uplifting the social security system in India and lists the channels through which they go about doing it.

Union Budget 2021 Outcome
In case the employee’s PF contribution was deducted but not deposited by the employer, it will not be allowed as a deduction for the employer.

EPFO Overview

EPF and its applicabilty

The Constitution of India under the ‘Directive Principles of State Policy’ specifies that the State shall make effective provision for securing the right to work, education, and public assistance in cases of unemployment, old age, sickness and disablement, and undeserved want within the limits of its economic capacity.

In adherence to this statement, there was a need for a dynamic social security programme in the changing environment. Thus, the legislation for a provident fund was created as an attempt to provide a dignified life for the employees and their dependents once their employment period came to a halt.

The Employees’ Provident Fund (EPF) came into existence with the enactment of the Employees’ Provident Funds (EPF) Ordinance in 1951. The EPF Ordinance was later replaced by the EPF Funds Act, 1952. The EPF Bill was introduced in the parliament in 1952 to provide provident funds for employees in factories and other establishments.

Law that governs employees’ provident fund is now referred to as the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 (also called The Act). The Act has its applicability all over India except in Jammu and Kashmir.

Structure of EPFO

The Act and all its schemes are administered by a tri-partite board called the Central Board of Trustees (EPF). The board comprises representatives of the 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.

1. The Employees’ Provident Funds Scheme, 1952 (EPF)
2. The Employees’ Pension Scheme, 1995 (EPS)
3. The Employees’ Deposit Linked Insurance Scheme, 1976 (EDLI)

The EPFO is an organisation 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.

Functions of EPFO

EPFO assists the Central Board of Trustees (EPF) in the administration of a provident fund scheme, 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
• Updating records

EPFO is also the nodal agency for implementing Bilateral Social Security Agreements with other countries. Further, it is one of the largest social security organisations 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 employers and employees by adopting IT-enabled tools and techniques. EPFO has undertaken a 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 works as a service provider for the covered beneficiaries, i.e. members. EPFO’s website provides access to information and online services.

Services Offered By EPFO

Universal Account Number

EPFO introduced UAN, which acts as an umbrella for 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 the linking of multiple EPF accounts (member IDs) allotted to a single member. Employees are required to activate their UAN at the UAN portal in order to avail a wide range of online services offered by EPFO.

The UAN portal offers a bouquet of services, such as dynamically updated UAN card, updated EPF passbook (including all transfer details), facility to link previous member IDs with the present ID, SMS regarding the credit of contributions in the PF account, and a facility for auto-triggering transfer request on change of employment. 
 

UAN Member E-Sewa for Employees

The UAN Member e-Sewa portal allows employees to register their UAN in the portal and activate it to access the services offered by the portal. The facilities available are downloading UAN card, updating KYC information online, receiving EPF account passbook linked to UAN, raise transfer request, and more.

Inoperative Accounts Online Helpdesk

Inoperative Accounts’ Online Helpdesk on the EPFO website was set up in February 2015 and has made tracking of old or dormant inoperative EPF accounts easy. It helps EPF members track their inoperative PF accounts, settle them or get them transferred to the present account by providing base minimum details, such as previous employment, to the extent known along with personal details. The service has been temporarily under maintenance.

Online EPF transfer

While the EPF transfer was possible online earlier under ‘Online Transfer Claim Portal’, with the introduction of UAN, the process of transfer is revised and shifted under the ‘Unified Portal’. This has made EPF transfer from one account to another easy, paper-free, and also hassle-free. Refer to our article on the online EPF transfer process for more information.

Online PF withdrawal

An employee is allowed to withdraw PF if he/she is not employed for 60 days post resigning the previous employment. EPFO has enabled online EPF withdrawal with a simple procedure for UANs linked with Aadhar. Refer to our article on online EPF 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 mandatory for all establishments to make EPF payment online. EPFO has a tie-up arrangement with some banks to collect EPFO dues and the participating banks are SBI, PNB, Indian Bank, Union Bank of India, Bank of Baroda, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank. Refer to our article on PF payment online for more details.

Centralised software for generation of Certificate of Coverage for international workers

EPFO has launched an online form through its centralised software to generate the Certificate of Coverage (CoC) to EPF members working in countries having Social Security Agreements with India.

SMS Service/Alerts and Missed Call Service

The SMS service and missed call service were launched to give better access to the EPF account to the EPF members who have activated their UAN. Members can access details of KYC status, last contribution, total EPF balance by sending an SMS in the format EPFOHO UAN followed by the first three characters of their preferred language to 7738299899.

Members can also obtain details by giving a missed call to 011-22901406. SMS alerts are also sent to the members intimating remittance, withdrawals, interest credit, etc. Also, SMS is sent to the employers for non-deposit of dues.

Electronic return for the exempted establishment – Adoption of IT tool

The process of submitting the monthly return by exempted establishments easier and hassle-free through the e-return filing system.

Passbook and claim status

Members can view their passbook and check their claim status online. Members can also update/modify basic KYC details online.

Grievance redressal

Members/employers can also raise a complaint online with respect to EPF withdrawal, EPF transfer, pension settlement, and more. The grievance redressal is accorded the top-most priority.  By systematic monitoring at the head office level, the number of pending cases has drastically come down from 20,000 grievances to only 2,000-3,000 grievances on any given day, which is a minuscule figure when seen against the 15 crore accounts being handled by the EPFO.

Various circulars issued by the EPFO can be accessed on their online portal. Recently, there have been circulars on the declaration of the rate of interest for members on their EPF account, coverage of non-enrolled contract/casual employees in respect of Indian Railways, etc.

Frequently Asked Questions

What is the statutory rate of contribution to EPF account?

The statutory rate of contribution is 12% of basic salary plus dearness allowance of Rs 15,000 per month. In case an employee wishes to contribute on a higher basic salary, the same is possible after taking permission from the provident fund authorities.

Are there any restrictions on the withdrawal of EPF?

An employee resigning from service (except in the case of retirement) can withdraw PF only after the expiry of two months.

Can an employee transfer the PF account in case of a change in employment?

In the case of a change in employment, an employee can transfer the PF account to the new employer by submitting Form 13. The request for transfer can also be made online.

How does the EPFO credit interest on the EPF accounts?

The EPFO credits interest on the monthly running balances in the EPF accounts. The rate of interest is notified each year. For FY 2022-23, the rate notified is 8.15%.

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