Employees' Provident Fund Organisation


The Employees' Provident Fund Organisation, is an organisation tasked to assist the Central Board of Trustees. Employees' Provident Fund is a statutory body established by the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 and is under the administrative control of the Ministry of Labour and Employment, Government of India.
EPFO assists the Central Board in administering a compulsory contributory Provident Fund Scheme, a Pension Scheme and an Insurance Scheme for the workforce engaged in the organised sector in India. It is also the nodal agency for implementing Bilateral Social Security Agreements with other countries on a reciprocal basis. The schemes cover Indian workers as well as International workers. The EPFO's apex decision making body is the Central Board of Trustees.
On 1 October 2014, the government of India launched Universal Account Number for Employees covered by EPFO to enable PF number portability.
The total assets under management are more than 11 lakh crore as of 2018.

Origin of the Scheme

The question of providing for the future of industrial workers after their retirement or for their dependents, in the event of their premature death, engaged the attention of the Central Government for a long time. The first Provident Fund Act passed in 1925 for regulating the provident funds of some private concerns was limited in scope. In 1929 the Royal Commission on Labour stressed the need for formulating schemes for instituting provident funds for industrial workers. In the Indian Labour Conference held in 1948, it was generally agreed that the introduction of a statutory provident fund scheme for industrial workers might be undertaken. To test such a scheme in a restricted field the Coal Mines Provident Fund Scheme was launched in 1948. The success of this Scheme led to the demand for its expansion to other industries.
Accordingly, close of the year 1951 witnessed the promulgation of the Employees' Provident Funds Ordinance. The Ordinance promulgated on 15 November 1951 was replaced by the Employees' Provident Funds Act, 1952 which extended to the whole of India except Jammu and Kashmir. The Employees' Provident Funds Scheme, 1952 framed under section 5 of the Act was brought into force by stages and was enforced in its entirety by 1 November 1952.

Provident Fund

The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 came into effect on 4 March 1952. Six industries namely 1.Cement 2. Cigarettes 3.Electrical, mechanical or general engineering products 4.Iron and Steel 5. Paper 6. Textiles came under implementation of the Act w.e.f 1, November,1952. The organisation is administered by a Central Board of Trustees, composed of representatives of the Government of India, State governments, Employers and Employees. The board is chaired by the Union Labour Minister of India. The Chief Executive of the EPFO, the Central Provident Fund Commissioner, reports to the Union Labour Minister through the Secretary of Labour and Employment in the ministry. The headquarters of the organisation is in New Delhi.
The Constitution of India under "Directive Principles of State Policy" provides that the State shall within the limits of its economic capacity make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old-age, sickness & disablement and undeserved want. The EPF & MP Act, 1952 was enacted by the Parliament of India and came into force with effect from 4 March 1952 as part of a series of legislative interventions made in this direction. Presently, the following three schemes are in operation under the Act:
  1. Employees' Provident Fund Scheme, 1952
  2. Employees' Deposit Linked Insurance Scheme, 1976
  3. Employees' Pension Scheme, 1995
Retirement fund body EPFO on 5 March 2020 lowered the rate of interest on employees provident fund to 8.50% for 2019-20, from 8.65% in the previous fiscal.

Structure

The EPFO has the dual role of being the enforcement agency to oversee the implementation of the EPF & MP Act and as a service provider for the covered beneficiaries throughout the country.
The Act is administered by Central Board of Trustees, EPF a Statutory Board constituted by the Central Government under Section 5A of the Act. The CBT, as the Board is informally called, consists of a Chairman, a Vice Chairman, 5 Central Government Representatives, 15 State Government Representatives, 10 Employees' Representatives, 10 Employers' Representatives with Central P.F Commissioner and the Member Secretary to the Board. The Executive Committee of the CBT is constituted from among the members of the CBT to assist the Central Board in discharge of its function related to Administrative matters.
The officials of the organisation in the Cadre of Commissioners are appointed by the Central Board under Section 5D for efficient administration of the Act and Schemes. To this end, the commissioners of the organisation are vested with vast powers under the statute conferring quasi-judicial authority for assessment of financial liability on the employer, search and seizure of records, levy of damages, attachment and auction of a defaulter's property, prosecution and arrest and detention of defaulters in civil prison etc.
Administratively, the organisation is divided into zones which are headed by an Additional Central Provident Fund Commissioner. At present, there are 10 Zones across the country. Further below, the states have either one or more than one Regional Offices headed by Regional Provident Fund Commissioners which are again sub- divided into Sub-Regions headed by Regional Provident Fund Commissioners. To assist them are Assistant Provident Fund Commissioners looking after the enforcement of the Act and Schemes. Many districts in the country have district offices where an assistant provident fund commissioner is stationed for implementation of the scheme and attend to grievances.
The total manpower of the EPFO is at present more than 20000 including all levels. The Commissioner cadre numbering 815 are recruited directly, competitively, through the Union Public Service Commission of India as well as through promotion from lower ranks. Subordinate Officers are also recruited directly in addition to promotion from the staff cadre of social security assistants.

Universal Account Number (UAN)

The Universal Account Number is a 12-digit number allotted to employees who are contributing to EPF. It will be generated for each of the PF member by EPFO. The UAN will act as an umbrella for the multiple Member Ids allotted to an individual by different establishments and also remains same through the lifetime of an employee. It does not change with the change in jobs. The idea is to link multiple Member Identification Numbers allotted to a single member under single Universal Account Number. This will help the member to view details of all the Member Identification Numbers linked to it.
The major benefit of UAN or Universal Account Number will include easy tagging of multiple Employee's Provident Fund Member Id under a single number, thus reducing the confusion. The UAN will help in easy transfer and withdrawals of claims. Along with this services like Online Pass-Book, SMS Services on each deposit of contribution and Online KYC Update can be provided on the basis of UAN number. One can transfer balance from one EPF to his/her another EPF account with the help of UAN.
There are new UAN portal start to check your EPF balance and nowadays all the details like how to check UAN status, download UAN EPF passbook, check EPF balance, provident fund claim and many more facility provided by new UAN portal.
EPFO has now started to provide the refund of Administrative charges if all the KYC details are updated for all employees. This incentive program is announced for the Year 2016-2017.
The member who is unable to withdraw PF for any reason can withdraw without consent of employer. They can submit FORM 19 for EPF and FORM 10C for EPS with any of the following officials attestation to EPFO office in which their EPF account is maintained and
Universal Account Number or UAN provided by EPFO is mainly used to track PF balance and PF claim status. Then, you have to activate this by visiting nearest EPFO office. You will not be able to track your PF status and balance without activation

Longevity risk

In March 2018, Union Cabinet claimed that almost 84 million EPFO subscribers did not have birth dates and that father's name was missing in 110 million accounts.
Critics asserted that such excuses were turning common to cancel pension and other annuity schemes without any legal backlash, riot or even public debate. The underlying cause is believed to be unfunded or underfunded risk through longevity swap transactions.