EPF Act amendment draft in 3 months

The government-appointed working group to amend the existing Employees Provident Fund Act is expected to have prepared a Bill in the next three months.

The draft would be thereafter opened for public comments, said Samirendra Chatterjee, Central Provident Fund Commissioner, at a seminar of the Indian Chamber of Commerce.

The EPF Act was enacted for creating provident funds for employees in factories and establishments, to make provision for security after retirement.

The EPFO was also planning to modify some existing schemes, such as converting the Empoyees Deposit Linked Insurance Scheme into a group insurance scheme, said Chatterjee. It is also contemplating incorporating annuities in pension schemes, he added.

Also, EPFO is planning to block PF accounts unclaimed for more than five years. “We are planning to block unclaimed accounts, so that the interest is not paid on a regular basis. This will reduce the cost of maintaining the accounts. However, we will pay the interest accumulated at the time of withdrawal of money,” Chatterjee said.

There are about 20 million unclaimed PF accounts with the EPFO, with a sum of about Rs 15,000 crore. Out of this, about half the accounts have less than Rs 1,000 each as balance, according to Chatterjee.

EPFO has also initiated the exercise of computerising all its regional offices and simplifying the process of return, to reduce the time period between giving the claim form and taking the return to one week.

The board recently approved Rs 96 crore for implementation of the first phase of the computerisation plan.