Employees Provident Fund Organisation (EPFO), Schemes and Function

India has won the International Social Security Association’s (ISSA) Good Practice Award for the Asia-Pacific region this year for five services offered by the Employees’ Provident Fund Organisation (EPFO).

Employees Provident Fund Organisation (EPFO)

An act of the Indian Parliament established the Employees’ Provident Fund Organisation (EPFO) to offer social security to Indian workers. This law was enacted by the Employee Provident Fund and Miscellaneous Provision Act of 1952. The Ministry of Labour and Employment of the Indian government is responsible for running EPFO. In terms of customers and financial activities, it is one of the biggest social security agencies in the world.

EPFO Organisational Structure

An overall board of trustees is in charge of administering the EPFO. The Central Board and Executive Committee are members of the Trustees Board

• Both the Central Board and the Executive Committee are comprised of a chairperson. The Executive Committee has a central PF commissioner, and the central board has a vice-chairman.
• They are all represented by the federal government, the states, the unions, and the employers.
• Each zone in the regulatory structure of EPFO is headed by an Additional Central Provident Fund Commissioner.
• Currently, there are ten Zones spread out over the nation.
• One or more regional offices are overseen by Regional Provident Fund Commissioners in each state (Grade I).
• Each region’s Sub-Regions are overseen by Regional Provident Fund Commissioners (Grade II).
• Every district has a separate office.

Major Schemes Managed by EPFO

3 major schemes is being administered by EPFO are:

Employees’ Provident Fund (EPF) Scheme, 1952

• A retirement savings plan where both employer and employee contribute 12% of the employee’s basic salary and dearness allowance.
• The accumulated fund is available upon retirement, resignation, or can be partially withdrawn for specified purposes.

Employees’ Pension Scheme (EPS), 1995

• Provides monthly pensions to employees after retirement (minimum service of 10 years).
• Benefits include pensions for widow(er)s, children, and dependent parents in case of the employee’s demise.

Employees’ Deposit Linked Insurance (EDLI) Scheme, 1976

• Offers life insurance coverage to EPF members.
• The insurance amount is linked to the employee’s salary, with a maximum benefit of ₹7 lakh.

Recent Initiatives

• E-Proceedings: Transitioned from physical to online judicial proceedings for determining dues from defaulting employers.
  • Outcomes:
    • Transparency and Fairness in inquiries.
    • Reduced Inquiry Time and delays.
• Nidhi Aapke Nikat 2.0: Ensures last-mile delivery of services in districts lacking EPFO presence.
  • Grievances are resolved efficiently without extensive travel.
• Multilingual Call Centres: Offers information and grievance redressal in 12 major regional languages.
  • Promotes inclusivity and member satisfaction by resolving issues in members’ preferred languages.
• Prayaas Initiative: Provides Pension Payment Orders (PPOs) to retiring members on their retirement day.
  • Demonstrates a commitment to prompt service delivery.
• Digital Life Certificate (Jeevan Pramaan Patra): Facilitates Aadhaar-based biometric authentication for pensioners to submit Life Certificates digitally.
  • Recognized for improving ease and convenience for pensioners.

Benefits of EPFO

• For those who earn a salary, it is one of the most popular investing options. While bank interest rates are gradually declining, the employees’ provident fund pays an interest rate of 8.65%.
• Additionally, future provident fund returns could be higher. EPFO puts between 5 and 15 percent of investable deposits into ETFs.
• Given the sound management of the assets and the size of the corpus, a higher rate of interest is generated.
• Trade organisations, employee organisations, or unions constantly watch out for the interests of their members.
• Another advantage is that even though interest is tax-free, an employee’s contribution to an EPF account is still deductible under section 80 C of the tax code.

EPFO UAN (Universal Account Number)

Each employee at a company is given a 12-digit number. In the event that a person has multiple member IDs from other organisations, all of those IDs will be aggregated into a single UAN number that will not change during their entire lives. This number does not change even if an employee change employer.

Many benefits are attributable to UAN.

• Creates less confusion by using a single UAN number instead of many IDs.
• Transfers and withdrawals of claims are easy.
• Online passbook SMS services
• Online KYC update
• Download the UAN EPF book and view your online EPF balance

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