EPFO: Employees Provident Fund Organisation or the EPFO is an organization controlled by the Ministry of Labour and Employment, Government of India. EPFO is assisted by the Central Board of Trustees in managing and administering a compulsory contributory Provident Fund Scheme, Pension Fund Scheme and Insurance Scheme for every single person engaged in the workforce of the organized sector in India.
EPFO – Know About Employees Provident Fund Organisation
The organization runs the biggest social security scheme in India and aims at securing the future of every industrial and other organized sector workers and their dependents after their retirement or prematurely death. The Employee’s Provident Fund and Miscellaneous Provisions Act was passed in 1952 to form the Central Board of Trustees, and the EPFO brought The Employees’ Provident Funds Scheme, 1952 framed under section 5 of the Act into full force on 1st November 1952.
Salient features of EPFO
- Central Board of Trustees is the apex decision making the body of EPFO.
- Responsible for securing the future of millions of employees engaged in the organized sector post their retirement and/or after their demise.
- They act as the enforcer of The Employee’s Provident Fund and Miscellaneous Provisions Act, 1952.
- They perform the role of a service provider for the covered beneficiaries throughout the country.
- The EPFO manages assets worth USD 128 Billion which one of the biggest Social Security Schemes in the world as per the reports of the World Bank.
The EPFO currently manages 3 different schemes under the Employee’s Provident Fund and Miscellaneous Provisions Act, 1952
- Employees Provident Fund Scheme (EPF): It is a mandatory tax-free savings scheme where every person working in the organized sector in India, must contribute 12% or more of the basic pay + DA of their monthly salary towards this scheme. The employer is also required to match the contribution made by the employee but up to 12% of the basic pay + DA of the employee’s salary. The employer contributes 3.67% towards EPF and 8.33% towards EPS or Employees’ Pension Scheme. The amount deposited in the PF account of the employee earns interest at the rate of 8.67% every year and is tax-free unless the money is being withdrawn before 5 years of service and form 15G is not submitted during The interest rate is decided by the EPFO every year. Inactive accounts do not earn interests.
- Employees’ Deposit Linked Insurance Scheme (EDLI): The aim of this scheme is to provide life insurance coverage to all the employees covered by EPF. The employee is automatically enrolled for EDLI when he/she is getting enrolled for EPF. The employee does not make any direct contribution towards EDLI, but it’s the responsibility of the employer to manage it for the employee. The employer contributes 0.50% towards EDLI. EDLI is claimable by the nominee if the employee passes away and is 30 times the salary (Basic + DA). However, the prerequisite for EDLI is employee must be under active employment at the time of death.
- Employees’ Pension Scheme (EPS): Employees enrolled for EPF are automatically enrolled for EPS as well. The employee does not make any direct contributions towards EPS, but the employer does. The employer contributes 8.33% of the employee’s salary (Basic + DA) towards EPS. Additional to this, the central government also contributes 1.16% of the employee’s basic pay towards EPS. EPS does not earn any interest and the minimum employment period for availing EPS benefits is 10 years. The EPS provides lifelong pension to the employee and to the employee’s spouse and two children if the employee passes away. Recently the government has increased the pension amount to INR 1000 per month from INR 500.
The EPFO is responsible for facilitating different services for the employees as well the employers. For employees, the EPFO facilitates ways to manage their fund, and for employers, they provide easy ways to enable them to deposit the employee’s and their contribution every month. Here are the services offered by the EPFO in details.
EPFO Employee Services
Universal Account Number (UAN)
On 1st March 2014, the Prime Minister of India Mr. Narendra Modi launched the Universal Account Number or UAN to facilitate PF number portability. It is 12 digit number allotted to every employee or member of the EPFO. It was observed that many employees under EPFO changed organizations frequently leading to a huge confusion about current PF accounts. It was difficult maintaining different PF accounts of the same person and transferring PF from one to another was a proving to be a herculean task. With this in mind and to simplify the process of consolidating all PF accounts of a person under one universal account the UAN was launched.
This is a full online service where an account is created for an individual with the UAN, and he/she can see all the PF accounts and the respective organizations they worked with. There is a facility to transfer claims from on PF account to another, and thus the process of maintaining PF has become very simple. One individual is allowed to have multiple PF accounts, but they are all registered under a single UAN number. All that one has to do is submit the UAN number while changing organizations and his new PF account would be opened under that UAN.
Facilities Provided by UAN portal
- Members can check their PF account balance online and print out the passbook.
- Members can submit Proof of Identity and Proof of Address and other documents online.
- Intimating the member about every deposit made through SMS facility
- Claim forms are available online for the members to fill up and submit at the nearest PF office
- Online Claim transfer application can be made easily
The EPFO has introduced a new portal named https://unifiedportal-mem.epfindia.gov.in/memberinterface/ for UAN management and for the benefit of the employee.
EPFO Employer Services
The EPFO has launched a unified portal called https://unifiedportal-emp.epfindia.gov.in/epfo/ from where employers can create an account and easily transfer their own and the employee’s contributions from their submitted bank accounts. The portal also facilitates them to update employee details and their KYC documents.
Through the new unified portal, the employers can avail the benefits to government schemes like Pradhan Mantri Rojgar Protsahan Yojana (PMRPY). Through this scheme, an employer is incentivized to generate more employment in its organization, and the government offers to pay the employer’s share of EPS for the employee. This scheme enables an employer to create more jobs in its establishment and helps fight the problem of joblessness in India.
New EPF withdrawal Rules by EPFO
The Ministry of Labour and Employment, Government of India introduced new PF withdrawal rule as of 2016 to facilitate early withdrawals. These are a part of amendments made to the Employees Provident Fund Scheme, 1952.The changes introduced as under:
- The EPF amount cannot be fully withdrawn before attaining the retirement age of 58 years.
- The members are encouraged to keep the money in EPF and not immediately withdraw after resigning from an organization and rather transfer it if they continue with employment later on.
- The PF can now be withdrawn without the assistance from the employer if the employer is not cooperating with the employee.
- New separate forms have introduced (downloadable from EPF portal) to facilitate claims submission for employees with and without radar.
- Attested claims form from any gazetted officer, magistrate, MLA, MP or President of the Village Union of the employee can be submitted to apply for claiming the PF amount.
The EPFO is doing a laudable job by providing financial assistance to millions of people in India by making signing up for EPF compulsory. It is aiming for a fully digitalised service by the year 2030.Although better social security schemes are provided by foreign governments to their nationals, yet in a huge country like India, providing people with such an elaborate and useful social security scheme is a mammoth task that needs to be praised. EPFO is empowering every person employed in the organized sector. People should sign up for the schemes offered by EPFO and thus make their effort successful.