IS ‘EMPLOYEES’ PROVIDENT FUND ORGANISATION’ NEED REFORMS?

[krishna murthy]

By seeing some incidences in some Provident Fund Offices, continuing  the same  procedure of 1952 paper work and negligence in some Provident Fund offices in delaying the claims etc.,  one can strongly  demand for the need  of ‘REFORMS’ and force to implement the ‘REFORMS’  in “ Employees’ Provident Fund Organisation”.

Briefly about the EPFO, The  Employees’ Provident Fund Organisation , is an Organization  which  was established  as  a statutory body formed by  the  Employees' Provident Fund and Miscellaneous Provisions Act, 1952 and is under the administrative control of the Ministry of Labour and Employment ,Government of India.

The EPF & MP Act, 1952 was enacted by the Parliament of India  and came into force with effect from 4th March 1952 as part of a series of legislative interventions made in this direction. The Employees' Provident Funds Scheme, 1952 framed under section 5 of the Act was brought into force by stages and was enforced in its entirety by 1^st  November 1952.

EPFO assists the Central Board in administering a compulsory contributory Provident Fund Scheme, a Pension Scheme and an Insurance Scheme for the workforce engaged in the organized sector in India. It is also the nodal agency for implementing Bilateral Social Security Agreements with other countries on a reciprocal basis. The schemes cover Indian workers as well as International workers (for countries with which bilateral agreements have been signed. As of now 17 Social Security Agreements are operational)  It is a largest saving oriented  and social security organisation in India.

Presently, the following three schemes are in operation under the Act:

1. Employees' Provident Fund Scheme, 1952]
2. Employees' Deposit Linked Insurance Scheme, 1976]
3. Employees' Pension Scheme], 1995 (replacing the Employees' Family Pension Scheme, 1971)

In fact ‘Provident Fund A/c is a God gift to the employees. The Provident Fund main motto is improve the ‘Saving habit’ and provide ‘Social Security’, to the employees.  There are so many other benefits to the employees with this “ Employees’ Provident Fund Organisation”. Those are,

1. 100% security for the Employees  share of PF as well as ‘Employer share of PF’.
2. Motivates  saving habit from the date of joining in new Company.
3. At highest  rate  of interest , the PF yearly closing balances  will be calculated. Every year , the rate of interest  will be decided by  the  Central board , Union Leaders and  with the support of the  central labour ministry.
4. It provides loan facility when the members  required, as per the Provident Fund norms.
5. It provides  retirement  benefit ( One who completes  10 years of service) in the form Pensions till the members death , after that  wife / Husband (nominees) will get. After that or if nominees  are  not there , 2 children will till they attain 21 years. In case of handy cap children get till their death.
6. Those who can not continue the service  for more than 10 years due different reasons, can  claim the  EPF as well as EPS  from the “Provident Fund Department”  concerned, after 3 months from the date of resignation.  If required , he/she can  continue  pension scheme, by applying  “ Scheme Certificate form 10-C”.
7.  Minimum pension increased to ₹ 1,000/-.
8. EPF or EPS amount  can not be stopped  by any employer  or any  PF officer.
9. EPF or EPS amount  can not be attached by the court.
10.   On 1 October 2014, Prime Minister of India Narendra Modi launched Univesal Account Number for Employees covered by EPFO to enable PF number portability.  It is more useful to settle the EPF & EPS accounts very quickly.
11. Recently, Digital System (100% Software) also introduced, in    “ Employees’ Provident Fund Organisation”. 

With the above so many benefits, the Employees’ Provident  Fund Organisation’  is running with ( As per their printed  pomp lets as on 2016) ,

1. Total number of active workers              4  Crores
2. Total number  EPF accounts                 17  Crores
3. Total corpus                                           8 Lakh Crores
4. Total annual claims settled                    1.2 Crores
5. Total annual Online grievance settled   2.2  Lakhs
6. Total Number of Establishments            9.5  Lakhs
7. Total number of Pensioners                   55   Lakhs

As of December 19, 2016, the Provident Fund interest rate for 2016-17 fiscal has been revised to 8.65%, representing a decline of 15 basis points over the previous 8.8% rate.

Then, what is the need of ‘REFORMS’ in  ‘The  Employees’ Provident Fund Organisation’.

Whatever  benefits are there, whatever  saving system habituated , whatever social security is there,  there are so many  loop holes in  “The  Employees’ Provident Fund Organisation”. Those are,

1. There is no 100% transparency in  EPF & EPS deposit amounts and Interests.  Like bank balance, members or employers are not able to see, at any point of time.
2. There is no 100% transparency on un claimed amounts.
3. To settle the  superannuation issues and other issues, the department  officers  are taking , more than 100 days.
4. For the settlement of  superannuation claims and other claims , the PF department  insisting number of documents,  several signatures of employers, several signatures  of members etc.,
5. Some of PF departments  PRO’ s do not proper awareness , what are the documents required to settle issues and to tell the members. Because of these reasons , members are coming to the PF offices several times, with the same work.
6. For example , one ‘X’ member went to PF office to get the information to settle the “ Superannuation” pension, who has not completed 10 years service and attained 58 years. After going 2 times , one day the PRO said the member to submit the following documents along with Form-10D. Those documents are, Scheme Certificate original , Form-10D duly filled and signed by the member as well as employer, Aadhar card Xerox duly attested, Bank Pass Book Xerox duly attested, Non employment affidavit on ₹ 20/- Non judicial stamp paper and duly attested by gazetted officer and 3 post card size full family photos.

Another day the ‘X’ member went to the PF office to submit. There the PRO said that on all the 3family photos also , employer signature required.

On 4^th day , the member went there , after attestation of family photos by the employer. Then the officer took the application along with all the documents and given the acknowledgement. After 15 days , they sent the file to another officeand there is no proper information. This indicating that the PRO do not have aware ness, which office will settle this file. Latter , the member received call from other PF office and they require some more employer signatures and member signatures and member identification symbols. After some days, the member went to the other PF office andcompleted all the signatures and memberidentification symbols etc., and again submitted personallywith the PF office and taken the acknowledgement. As of date more or less 100 days over and the ‘X’ member issue was not settled.

Today, we are in 21 century and Digital era. Why all these documents and formalities required. PF is a member hard earned money and he deposited as a security. When he not completed 10 years service and attained age 58 years, one single application, Scheme Certificate( if it is not there one Affidavit)and Aadthar card is sufficient to settle the issue. Rest of the information , everything is with the PF department only.Why Affidavit is required?Why family photos are required ?‘X’ is alive. They are going to pay any pension or what? . Why the member identification symbols are required?

HOW THE UN CLAIMED CONTRIBUTIONS ARE INCREASING IN PROVIDENT FUND ORGANISATION ?

We can say it is very simple.

1. Not paying back the EPF & EPS settlement amounts to the members due to lack of their complete information.
2. To enrol the new company into the “ Employees’ Provident Fund Organisation’, they required minimum 20 employees. What the employers are doing, they are creating some factious  employees names, to get the PF A/c for the other regular and genuine employees. Latter , from the second month on wards , they are removing the  factious  employees names. Thus those employees contributions  are becoming as un claimed contributions.
3. Some employees death after resignation in middle, Nominees , dependents do not have any awareness of this PF, also increasing  un claimed contributions.
4. Some employees  may be educated  and they may know about PF. Due to some other professions or business works , they may resign the  jobs. And they may not show the interest  to claim the  some months EPF & EPS etc.,  That is the reason , the un claimed  contributions are increasing.
5. And the accumulated   interest there on, also increasing the un claimed contributions.

However, the un claimed contributions should become an asset to the existing and running members.

WHAT ARE THE ‘REFORMS’REQUIRED IN “ EPFO”?

The following ‘REFORMS’are required in “ Employees’ Provident Fund Organisation ”:

1. Must simplify the EPF & EPS settlement procedure. Physically with a single application along with the “Aadhar card” Xerox as well as ‘On line settlement  must be implemented. Lack of this , several members are suffering  to claim the their hard earned money. Hence, the EPFO department must give first priority to this.
2. For any type of settlement should not take  more than 2 hours. Exceptional issues  it may take  3 to 6 days.
3. For any type of  settlement  must consider  ‘Aadhar card’  number to avoid frauds from the inside and outside  people.   
4. All EPF and EPS deposits and interest rates , all types of calculations must be transparent .
5. Un claimed amounts must be transparent and to be  disclosed to the public. It is the hard earned money of the members and interest there on.
6. Every EPFO office  must arrange a ‘Balance checking Machine’ at the reception to know their  PF A/c  details with the help of UAN Number.
7. Each and  every EPFO office  must supply cooling water and provide sitting arrangements to the members.
8. For the senior citizens , must give first priority in any type of settlements.
9. PRO’s must have full knowledge of “Employees’ Provident Fund Organisation” , settlements and forms used etc.,
10. Members should have opportunity to apply within 3 days from the date of resignation. Now, everything is through on line only. Why the members have to wait till 3 moths?
11. While registering the employees only, must insist the employer to submit full and complete details of the employees. If required send the field officers to the respective companies  to get the employees details. Or else do not accept the PF contributions.
12. Once you have the full details of employees, find them and  intimate them and transfer the funds to their Bank Accounts.
13. The rate of interest should be increased to 9% minimum.
14. For the pension calculation, the devising factor to be reduced to 65. So that the members may get little more pension.  If one employee invest same amount in mutual Funds, after 35 years , he/she will get more than that the EPFO paying now, if he / she invests the lumsum  amount  in any ‘Post Office’.  And finally , after 1000 years  also, he’s /she’s nominees will get back the principle amount.
15. Out of un claimed contributions, must show some benefits to the existing members.  
16. Must create the awareness to the employees as well as employers about the  PF schemes and their benefits etc.,

Discussions to this article

[Ganeshan Kalyani]

Dear Sir, very nice appeal and infact genuinene request. Yes there are huge amount of balance is lying in Provident Fund account which are unclaimed by the employee. Yes the company which takes responsibility for enrolling the newly joined employee into Provident Fund should also take responsibility in arranging /coordinating to pay back the contributed Provident fund to the employee resigned. I agree some companies do collected required documents and submit to Provident Fund office but there is no follow up whether the application has been processed or not. Yes it is practically seen that Government officers are loaded with work so only those files are processed which are enquired by applicant. As such if no follow up then the file gets less priority and it steps down to bottom of the piled up files. Yes there should be provision of enquiry and the officer for this purpose should carry good knowledge and who can advise the visitors properly and thoroughly. Yes as you said generically the officer asks the applicant to submit the file and request to come on later day. The files moves to higher officer and he points out the deficiency in the application and thereby calls for the pending document by sending back the file to the lower officer. If the lower was aware of all the requirements then he would have advised at the time of filing of application by the applicant. Here, only lower officer cannot be held responsible because may be the higher officer would not have updated the new requirement of document to the lower officer. Thus the problem of delay processing. Many reasons may be cited but there is need for the provision of an officer who would help quide the applicant to get their money back. Thanks.

[krishna murthy]

17. Must make habituation to the employees/family members as well as employers for the submission of necessary documents , KYC and keep the PF account properly, years together.

18. Must get the complete information about all the old and new employees and their family members , nominees , bank accounts and up date as a war foot basis.

19. When the employer delay in PF Contributions, the EPF department, collecting interest, penalties and some times imposing punishments. In the same way , when the claims delayed for the members due to EPF Department technical problems , The EPF Department must pay interest and penalties. And Officers concerned must be responsible for their delays.

20. There must be a Apex body to settle the complaints of members, like 'Ombudsman' for Banks complaints, 'SEBI' for Financial Markets, 'IRDA' for Insurance complaints and 'TRAI' for Cell phones and Telephones complaints etc.,

I hope the higher authorities concerned may take necessary action to keep the EPFO transparent/Accountable and also take immediate steps to simplify the with drawl facility & quickly i.e., with in hours like a Bank and Post office saving Bank Account with drawls. It is possible if the EPFO Department collects and maintains the members details in DIGITAL format.

Krishna murthy M.

[krishna murthy]

21. Must keep the CC cameras in all PF departments and watch the employees in coming timings & out going timings, chit chatings and find why and where the bottlenecks are there in settlement of PF claims. And must take actions against negligence etc., ( To settle simple ' Superannuation settlement' the EPF department is taking more than 100 days. This type of delay , carelessness should not be repeated in future )

22. When the EPF department introduces 100% Digital system, the department can save crores of rupees, by removing excess employees in EPF departments. And the same can be passed on to the employers.

23. Out of present EPF staff only , must appoint 2 or 3 employees to go around the companies and collect the employees information and help the employees if they require. And also help the employers to file PF returns properly and regularly without any problems.

24. Must treat the positive criticisers as the EPF advisers and do not treat them other way.

25. Higher authorities must take feed back from the members , EPF employees, employers and also ex members etc., Must check whether the higher authorities orders are implementing or not . And must see what actions to be taken at appropriate time. And try to implement the ideas of people, if these are good and possible.


"CLAIMING OF EPF/EPS AMOUNT MUST BE A MEMBERS RIGHT, BUT SHOULD NOT BE A REQUEST OR BEGGING "