Provident Fund: 5 Latest Developments 4 Crore Employees Should Know About

From online filing of claims to electronic transfer of payments to easing the process for partial withdrawals, the EPFO's new measures will benefit over 4 crore employees.

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Provident Fund: 5 Latest Developments 4 Crore Employees Should Know About

EPFO has extended deadline for submitting Aadhaar to June 30 for its over four crore members.


Highlights

  1. EPFO will make payments through digital fund transfers
  2. EPFO will invest Rs. 20,000 crore in exchange traded funds this fiscal
  3. EPFO subscribers can now complete the whole process online

Retirement fund body EPFO or Employees' Provident Fund Organisation has been coming up with many initiatives for smoother processing of provident fund claims. From online filing of claims to electronic transfer of payments to easing the process for partial withdrawals, the EPFO's new measures will benefit over 4 crore employees. At present the employees' entire 12 per cent contribution is deposited into his EPF account. Besides, 3.67 per cent is also contributed to the EPF account by the employer who also contributes 8.33 per cent of basic wages to the EPF account.

1) EPFO will make payments to beneficiaries through electronic or digital fund transfer system only for ensuring "quick transfer of funds, and easier tracking and reconciliation thereof," the retirement body said in a statement. Such move is likely to benefit 4.5 crores EPF subscribers and around than 54 lakh pensioners. This follows Labour Ministry making amendments in social security schemes administered by EPFO.

2) Retirement fund body EPFO will invest Rs 20,000 crore in exchange traded funds this fiscal as it has decided to raise the investment limit in ETFs, Union Minister Bandaru Dattatreya said last month. The Finance Ministry had earlier notified a new investment pattern for EPFO, allowing the body to invest a minimum of 5 per cent and up to 15 per cent of its funds in equity or equity-related schemes. The EPFO had started investing up to 5 per cent of its investible deposits in ETFs in August 2015. In the first year (2015-16), Rs 6,577 crore was invested, while the figure for 2016-17 stood at Rs 14,982 crore. The return on investment in ETF was 13.72 per cent, the minister said adding Rs 234.86 crore was earned as dividend on the investment. (ETFs are baskets of securities that are traded, like individual stocks, on an exchange. Unlike regular open-end mutual funds, ETFs can be bought and sold throughout the trading day like any stock.)

3) As part of government's e-gov initiatives, EPFO subscribers who have activated their UAN and seeded their KYC (Aadhaar) with the retirement fund body will be able to apply online for PF final settlement, PF part withdrawal and pension withdrawal benefit from their UAN interface directly. This will help quicken the claim process. (UAN or Universal Account Number is allotted by the retirement fund body and the number allows portability of provident fund accounts from one employer to another.)

4) EPFO subscribers can complete the whole process online, without approaching the employers or the retirement body's field offices to submit the online claim. The claim submitted by the member would flow in soft form to EPFO database where it will be processed and the member's bank account credited.

5) EPFO has also relaxed norms for part withdrawals. The members are not required to "give any supporting document while preferring online PF Part Withdrawal case. Member's applying online will be taken as his self-declaration for preferring the advance claim," the retirement body said. 



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