 "V P Joy")
Some of the recent decisions of the Employees' Provident Fund Organisation (EPFO) have not gone down well with the employees. Central Provident Fund Commissioner V P Joy tells Arindam Majumder and Indivjal Dhasmana that EPFO will not take any decision against employees and decisions will be communicated more effectively to them. Edited excerpts:
Is there a communication gap between EPFO and trade unions? The recent move to have stringent conditions on premature withdrawal of funds evoked violent protests in Bengaluru...
We are talking to trade unions in the Central Board of Trustees (CBT) of EPFO. We also need to communicate to employees directly to tell them about various services and facilities offered by EPFO. Let us be very clear:
Every move we make will be for the benefit of employees and employers.
We don't want to do anything against the interests of employees as well as employers. Because, they are our clientele. When we do take certain decisions, we need to communicate to employees effectively. We have to show them their benefits. Voluntarily, then, there would be demand. We have made an action plan for this purpose - to start direct communication with employees.
Also, we'll develop our system to deliver services. We will do publicity campaigns through advertisements and social media.
We are asking because many decisions of EPFO have had to be rolled back...
I've been here only for a month. I cannot comment on the entire past of EPFO. I am only telling you the direction that we want to go.
How will One Employee, One EPF Account ease employees' lives?
We are advocating a lifelong EPF account, which is Aadhaar-linked universal account number (UAN). We have already given UANs, but it is so far distributed in 120 places. Each person's account is in those places. When he goes from one office to another, he has to file an application through his employer for transfer of account. This is unnecessary hassle for employees. Now, we are moving all these accounts to a central place. So, an employee going from one job to another will not have to change his account number, unlike in the previous system. Whatever his contribution, will come to this account.
Currently, you have to reconcile accounts after the employer pays money on behalf of employees. Will that system be improved further?
We are planning a new system where employers will immediately get receipt after paying EPF money for employees. In the current system, the employer pays money through banks and gives statement of accounts to us. But, both of these are not linked and, hence, require reconciliation. There would be automatic reconciliation in the new system.
The experience with investments in exchange-traded funds (ETFs) has not been great. Will there be a review of the decision?
These kinds of instruments are not very short term. Their effect is not seen in one month or two months. Experience tells us these instruments deliver in the long run. This is the basis on which CBT took a decision to park a portion of the funds in ETF.
Isn't there any need to review the decision?
CBT has already authorised a committee to examine whether any change is required. It is a continuous process.
Is there any chance of increasing investments beyond five per cent of the total funds in ETF?
CBT has not taken any decision to this effect. The examination would be to see what is to be done in the existing portfolio, whether there is a need to diversify, etc.
How do you see the competition between EPF and the National Pension System (NPS) since the latter also got some sort of tax advantage in the latest Budget?
We are not competitors. Our schemes are different. Our clientele is different. NPS subscribers are mainly government employees and general people; ours are workers and establishment.
Currently, EPF is preferred because it has tax advantage over NPS. Do you agree?
Schemes are not preferred on only one parameter. These have to have a lot of benefits.
How do you see the falling interest rate scenario in the economy affecting EPF returns, going forward?
If interest rates move down, our additional investments would be affected to that extent. But, all our investments are not new.
Will that require a change in the current pattern of investments?
It is a dynamic situation. If change is required, we will take it up.
With the restrictions on premature withdrawal rolled back, will there be a rethink on giving interest on accounts because these two are inter-linked?
As of now, there is no change.
Going forward?
The aim should be to reduce inoperative accounts. That is the aim of our scheme of One Employee, One EPF Account.
