UAN Activation: Universal Account Number or UAN is a service which deals with Employees’ Provident Fund in India. It was launched by the Prime Minister of India Mr. Narendra Modi on 1st March 2014. It is a service where all the provident fund accounts of a person employed in the organized sector are maintained systematically. The UAN Activation is done by the employee or the employer and once activated; the UAN serves as an umbrella for all the Provident Fund accounts of the employee. To understand UAN better, we must know a bit more about Employees Provident Fund Scheme in India and the organization called Employees Provident Fund Organisation.
The Employees’ Provident Fund Organisation or EPFO was formed by the provisions of The Employee’s Provident Fund and Miscellaneous Provisions Act, 1952. It came into full force on 1st November 1952. It is managed by the Central Board of Trustees which formed by the provisions of the same act. It manages a massive fund of assets worth USD 128 billion. The EPFO manages 3 different schemes under the Employee’s Provident Fund and Miscellaneous Provisions Act, 1952.
Employees’ Provident Fund Scheme
The EPF is a compulsory savings scheme offered by the Employees’ Provident Fund Organisation where every person engaged in employment in the organized sector is mandated to contribute 12% of his basic pay towards Employees Provident Fund. The employer also contributes 12%, and this fund is created with the aim to provide an employee with a secured future after their retirement. The employer is mandated to contribute 8.33% towards Employees’ Pension Fund and 3.67% towards Employees’ Provident Fund. The amount collected under the employee’s fund is tax-free unless withdrawn before 5 years of total service period across different organizations. This fund also earns interest at the rate of 8.65%. If there is a dormant period of more than 2 years, then the amount does not earn interest and can be withdrawn even before retirement.
Employees’ Deposit Linked Insurance Scheme
EDLI is a free life insurance benefit that is provided to all employees working in the organized sector. The employee gets enrolled for EDLI automatically when getting enrolled for EPF. The employee does not make any contributions as there is no such fund created. The employer contributes 0.50% of employee’s basic pay towards the premium of EDLI scheme. This is a scheme where if the employee passes away while in active service then the employer must pay thirty times the employee’s basic pay to the employee’s nominated beneficiary. There are certain scenarios where the EDLI amount appears to be too low. In those cases, the employer has the option to approach a private or national insurance provider to arrange for better insurance cover for its employees. The EDLI cover applies worldwide and 24 hours a day without any exclusion.
Employees’ Pension Scheme or 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. This fund does not earn any interest; however, the minimum service period needs to be 10 years to avail the benefits of Employees’ Pension Fund. This scheme is aimed at providing a monthly pension to every salaried individual employed in the organized sector. 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.
What is Universal Account Number?
The Universal Account Number or UAN was launched to facilitate PF number portability. It is 12 digit number allotted to every employee or member of the EPFO after UAN Activation. It was noticed that many employees under EPFO changed organizations frequently which led to a huge confusion about their current PF accounts. 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 bringing all PF accounts of a single 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 after UAN Activation. There are facilities to transfer claims from on PF account to another, and thus the process of maintaining PF has become much simpler. One member is allowed to have multiple PF accounts, but they are all registered under one UAN number. The employee must submit the UAN number to the new organization while joining.
Benefits of UAN Activation for Members
- Members can check their PF account balance online and print out the passbook after account passes UAN Activation
- Online Claim transfer application can be made easily after account passes UAN Activation
- Once account passes through UAN Activation the member can update his/her phone number to get updates about every deposit through SMS.
- Members can submit Proof of Identity and Proof of Address and other documents online after account passes UAN Activation
- Member can download claim forms from the portal after UAN Activation for submission.
The UAN portal for employees is https://unifiedportal-mem.epfindia.gov.in/memberinterface.
Benefits of UAN Activation for Employers
UAN Activation for employers is done by the employers themselves. The UAN portal allows them to easily transfer their own and the employee’s contributions from their linked bank accounts. After UAN Activation job of employers will become easier allowing them to concentrate more on the efficient running of the organization and plan more for the betterment and growth of their employees. Government schemes like Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) can be accessed from the newly launched employer’s UAN portal where an employer is encouraged to generate more employment in its organization by the government offering to pay the employer’s share of EPF for the employee as an incentive. This scheme enables an employer to create more jobs in its establishment. Employers can update and submit KYC from the UAN portal after UAN Activation.
The UAN portal for employers is https://unifiedportal-emp.epfindia.gov.in/epfo/
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 Aadhar card.
- 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.
Social security schemes like the ones offered by EPFO are also provided by foreign governments to their nationals, and in many cases, they are better, yet in a huge country like India, providing people with such elaborate and useful social security schemes is a mammoth task that is indeed commendable. The EPFO is empowering every person employed in the organized sector. Their compulsory savings schemes have made millions of life secured and will continue to do that in the years to come. With a prestigious national award one- Governance, the EPFO is can only look forward and take its members along with it through its initiatives.
Follow the Guideline to Login into UAN Login