You are here: Home » Economy & Policy » News
Business Standard

EPFO makes a New Year resolution to better service delivery

Raising the bar when it comes to investment in the stock market also figures high on its to-do list.

Press Trust of India  |  New Delhi 

EPFO, pension, retirement
Photo: Shutterstock

Retirement funds has its plate full, going into the next year -- from full digitisation to seeding, with the sole purpose of making service delivery better for its nearly 4.6 crore users. Raising the bar when it comes to investment in the stock market also figures high on its to-do list. Keen on service overhaul, the Employees' Organisation (EPFO) looks to start with linking of accounts with biometric identifier and generation of Universal Account Number (UAN) through mobiles. In 2017, the EPFO embarked on a journey with an eye on providing almost on -- ranging from withdrawal to submission of life certificate by pensioners. Speaking to PTI, the Central V P said, "The EPFO will be a paperless organisation by August 15, 2018, with complete digitisation of its operations. Moreover, our focus would be on providing to our members and pensioners through smart anywhere, anytime." The body, further said, has planned to put in place a service in a week that will allow the users to link their with accounts using "Apart from this, we would shortly provide a service to members to generate Universal Account Number (UAN) using At present, this service is available online," added. He told that the EPFO is on the way to linking all UANs with so that payments can go through using the Enabled Payment System (AEPS). AEPS is a that allows online inter- operable financial transaction at (point of sale/micro ATM) through (BC)/Mitra of any using authentication. Currently, of the 4.6 crore contributing members, as many as 2.75 crore have seeded their with their accounts. However, out of these 2.75 crore, 1.25 crore numbers have been verified. The EPFO has a mandate to verify all Aadhaar-seeded accounts for the switch to AEPS, which is seen to completely change the experience and efficiency of services for the better. The retirement funds body is also working on a plan that will ensure customers can see their share of exchange traded funds (ETF) investment units in their accounts from April onwards. Last month, the EPFO had approved a proposal on crediting ETF units to the account of members.

The decision was taken by EPFO trustees last month when they cleared an accounting policy for valuation and an equity investment policy prepared in consultation with IIM Bangalore. Subscribers can liquidate these investments at the time of withdrawal from the account upon retirement or taking advance on various grounds such as buying a home, children's marriage and their education. However, the catch is this facility will not make the account a demat one as the subscriber cannot do trading in this case and the EPFO would liquidate the ETF units only when members apply for withdrawals. The body had started investing its funds in ETFs in August 2015 and has put in around Rs 32,000 crore so far. The return on investment so far stands at 21.87 per cent. But this is notional because the EPFO would get this return only when it would liquidate this investment. It had also earlier approved a proposal for a centralised payment system to use the National Payments Corporation of (NPCI) platform, which would not just reduce transaction charges, but bring in more convenience. Under the current decentralised set-up, paying its beneficiaries involves higher transaction cost, delay in re- credits in case of a failed transaction and no scope for Aadhaar-enabled payments. The new arrangement will enable the EPFO to transfer funds on the same day to beneficiaries through the NPCI platform. Moreover, the EPFO may reconcile the transaction status on the T+0 basis (day of transaction plus zero days). This will lead to early recredit in the event of failed transactions and allow for Aadhaar-enabled transfer of funds. The EPFO is also looking at raising the wage ceiling for mandatory coverage of formal sector workers to Rs 21,000 in 2018, from Rs 15,000 per month. All those organised sector workers getting basic wages of up to Rs 15,000 per month are mandatorily covered under the social sector schemes run by the EPFO. The basic wage is the sum total of basic pay and dearness allowance paid to workers. A back of the envelope calculation suggests that the move may bring nearly 50 lakh more workers under the ambit of social security schemes of the EPFO. The Employees Enrolment Campaign (EEC) of the EPFO took off in January 2017 with an objective to enrol the left-out employees and provide incentives to employers in the form of waiver of administrative charges, nominal damages at Rupee 1 per annum and waiver of employee share if not deducted. During this drive, close to 1.01 crore additional employees came on board between January to June 2017.

First Published: Wed, December 20 2017. 12:52 IST
RECOMMENDED FOR YOU