EPF act amendment draft in 3 months

The government-appointed working group to amend the 60-year old employee provident fund act, is expected to submit a draft bill in the next three months. The draft would be thereafter open for public comments, said Samirendra Chatterjee, Central Provident Fund Commissioner, ministry of labour and employment, at a seminar by the Indian Chamber of Commerce.

The EPF Act was enacted for creating provident funds for the employees in working in factories and establishments, with the objective to make financial provisions for the future security of the industrial workers after retirement. The EPFO was also planning to modify some of its existing schemes, like converting the Empoyees' Deposit Linked Insurance (EDLI) Scheme into a group insurance scheme, said Chatterjee. This apart, it is also contemplating incorporating annuity in pension schemes, he added.

Also, EPFO is planning to block PF accounts unclaimed for more than five years, though the interest accumulated will be paid at the time of withdrawal. “We are planning to block unclaimed accounts, so as 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 1000 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 submitting the claim form and return to one week.

The board recently approved Rs 96 crore for implementation of the first phase of the computerisation plan. About 27 EPFO offices would be computerized by March 2010 in the first phase.