TMI BlogIS ‘EMPLOYEES’ PROVIDENT FUND ORGANISATION’ NEED REFORMS?X X X X Extracts X X X X X X X X Extracts X X X X ..... IS ‘EMPLOYEES’ PROVIDENT FUND ORGANISATION’ NEED REFORMS? - By: - krishna murthy - Other Topics - Dated:- 27-2-2017 - - By seeing some incidences in some Provident Fund Offices, continuing the same procedure of 1952 paper work and negligence in some Provident Fund offices in delaying the claims etc., one can strongly demand for the need of REFORMS and force to implement the REFORMS in Employees Provident Fund Organisation . Briefly about the EPFO, The Employees Provident Fund Organisation , is an Organization which was established as a statutory body formed 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. The EPF MP Act, 1952 was enacted by the Parliament of India and came into force with effect from 4th March 1952 as part of a series of legislative interventions made in this direction. 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 st November 1952. EPFO assists the Central Board in administering a compul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sory contributory Provident Fund Scheme, a Pension Scheme and an Insurance Scheme for the workforce engaged in the organized 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 (for countries with which bilateral agreements have been signed. As of now 17 Social Security Agreements are operational) It is a largest saving oriented and social security organisation in India. Presently, the following three schemes are in operation under the Act: Employees' Provident Fund Scheme, 1952] Employees' Deposit Linked Insurance Scheme, 1976] Employees' Pension Scheme], 1995 (replacing the Employees' Family Pension Scheme, 1971) In fact Provident Fund A/c is a God gift to the employees. The Provident Fund main motto is improve the Saving habit and provide Social Security , to the employees. There are so many other benefits to the employees with this Employees Provident Fund Organisation . Those are, 100% security for the Employees share of PF as well as Employer share of PF . Motivates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saving habit from the date of joining in new Company. At highest rate of interest , the PF yearly closing balances will be calculated. Every year , the rate of interest will be decided by the Central board , Union Leaders and with the support of the central labour ministry. It provides loan facility when the members required, as per the Provident Fund norms. It provides retirement benefit ( One who completes 10 years of service) in the form Pensions till the members death , after that wife / Husband (nominees) will get. After that or if nominees are not there , 2 children will till they attain 21 years. In case of handy cap children get till their death. Those who can not continue the service for more than 10 years due different reasons, can claim the EPF as well as EPS from the Provident Fund Department concerned, after 3 months from the date of resignation. If required , he/she can continue pension scheme, by applying Scheme Certificate form 10-C . Minimum pension increased to ₹ 1,000/-. EPF or EPS amount can not be stopped by any employer or any PF officer. EPF or EPS amount can not be attached by the court. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 October 2014, Prime Minister of India Narendra Modi launched Univesal Account Number for Employees covered by EPFO to enable PF number portability. It is more useful to settle the EPF EPS accounts very quickly. Recently, Digital System (100% Software) also introduced, in Employees Provident Fund Organisation . With the above so many benefits, the Employees Provident Fund Organisation is running with ( As per their printed pomp lets as on 2016) , Total number of active workers 4 Crores Total number EPF accounts 17 Crores Total corpus 8 Lakh Crores Total annual claims settled 1.2 Crores Total annual Online grievance settled 2.2 Lakhs Total Number of Establishments 9.5 Lakhs Total number of Pensioners 55 Lakhs As of December 19, 2016, the Provident Fund interest rate for 2016-17 fiscal has been revised to 8.65%, representing a decline of 15 basis points over the previous 8.8% rate. Then, what is the need of REFORMS in The Employees Provident Fund Organisation . Whatever benefits are there, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whatever saving system habituated , whatever social security is there, there are so many loop holes in The Employees Provident Fund Organisation . Those are, There is no 100% transparency in EPF EPS deposit amounts and Interests. Like bank balance, members or employers are not able to see, at any point of time. There is no 100% transparency on un claimed amounts. To settle the superannuation issues and other issues, the department officers are taking , more than 100 days. For the settlement of superannuation claims and other claims , the PF department insisting number of documents, several signatures of employers, several signatures of members etc., Some of PF departments PRO s do not proper awareness , what are the documents required to settle issues and to tell the members. Because of these reasons , members are coming to the PF offices several times, with the same work. For example , one X member went to PF office to get the information to settle the Superannuation pension, who has not completed 10 years service and attained 58 years. After going 2 times , one day the PRO said the member to submit the following documents along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Form-10D. Those documents are, Scheme Certificate original , Form-10D duly filled and signed by the member as well as employer, Aadhar card Xerox duly attested, Bank Pass Book Xerox duly attested, Non employment affidavit on ₹ 20/- Non judicial stamp paper and duly attested by gazetted officer and 3 post card size full family photos. Another day the X member went to the PF office to submit. There the PRO said that on all the 3family photos also , employer signature required. On 4 th day , the member went there , after attestation of family photos by the employer. Then the officer took the application along with all the documents and given the acknowledgement. After 15 days , they sent the file to another officeand there is no proper information. This indicating that the PRO do not have aware ness, which office will settle this file. Latter , the member received call from other PF office and they require some more employer signatures and member signatures and member identification symbols. After some days, the member went to the other PF office andcompleted all the signatures and memberidentification symbols etc., and again submitted personallywith the PF office an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d taken the acknowledgement. As of date more or less 100 days over and the X member issue was not settled. Today, we are in 21 century and Digital era. Why all these documents and formalities required. PF is a member hard earned money and he deposited as a security. When he not completed 10 years service and attained age 58 years, one single application, Scheme Certificate( if it is not there one Affidavit)and Aadthar card is sufficient to settle the issue. Rest of the information , everything is with the PF department only.Why Affidavit is required?Why family photos are required ? X is alive. They are going to pay any pension or what? . Why the member identification symbols are required? HOW THE UN CLAIMED CONTRIBUTIONS ARE INCREASING IN PROVIDENT FUND ORGANISATION ? We can say it is very simple. Not paying back the EPF EPS settlement amounts to the members due to lack of their complete information. To enrol the new company into the Employees Provident Fund Organisation , they required minimum 20 employees. What the employers are doing, they are creating some factious employees names, to get the PF A/c for the other regular and genuine employees. Latte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r , from the second month on wards , they are removing the factious employees names. Thus those employees contributions are becoming as un claimed contributions. Some employees death after resignation in middle, Nominees , dependents do not have any awareness of this PF, also increasing un claimed contributions. Some employees may be educated and they may know about PF. Due to some other professions or business works , they may resign the jobs. And they may not show the interest to claim the some months EPF EPS etc., That is the reason , the un claimed contributions are increasing. And the accumulated interest there on, also increasing the un claimed contributions. However, the un claimed contributions should become an asset to the existing and running members. WHAT ARE THE REFORMS REQUIRED IN EPFO ? The following REFORMS are required in Employees Provident Fund Organisation : Must simplify the EPF EPS settlement procedure. Physically with a single application along with the Aadhar card Xerox as well as On line settlement must be implemented. Lack of this , several members are suffering to claim the their hard earned mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey. Hence, the EPFO department must give first priority to this. For any type of settlement should not take more than 2 hours. Exceptional issues it may take 3 to 6 days. For any type of settlement must consider Aadhar card number to avoid frauds from the inside and outside people. All EPF and EPS deposits and interest rates , all types of calculations must be transparent . Un claimed amounts must be transparent and to be disclosed to the public. It is the hard earned money of the members and interest there on. Every EPFO office must arrange a Balance checking Machine at the reception to know their PF A/c details with the help of UAN Number. Each and every EPFO office must supply cooling water and provide sitting arrangements to the members. For the senior citizens , must give first priority in any type of settlements. PRO s must have full knowledge of Employees Provident Fund Organisation , settlements and forms used etc., Members should have opportunity to apply within 3 days from the date of resignation. Now, everything is through on line only. Why the members have to wait till 3 moths? While registering the employees only, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust insist the employer to submit full and complete details of the employees. If required send the field officers to the respective companies to get the employees details. Or else do not accept the PF contributions. Once you have the full details of employees, find them and intimate them and transfer the funds to their Bank Accounts. The rate of interest should be increased to 9% minimum. For the pension calculation, the devising factor to be reduced to 65. So that the members may get little more pension. If one employee invest same amount in mutual Funds, after 35 years , he/she will get more than that the EPFO paying now, if he / she invests the lumsum amount in any Post Office . And finally , after 1000 years also, he s /she s nominees will get back the principle amount. Out of un claimed contributions, must show some benefits to the existing members. Must create the awareness to the employees as well as employers about the PF schemes and their benefits etc., - Reply By Ganeshan Kalyani as = Dear Sir, very nice appeal and infact genuinene request. Yes there are huge amount of balance is lying in Provident Fund account which are unclaimed by the em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployee. Yes the company which takes responsibility for enrolling the newly joined employee into Provident Fund should also take responsibility in arranging /coordinating to pay back the contributed Provident fund to the employee resigned. I agree some companies do collected required documents and submit to Provident Fund office but there is no follow up whether the application has been processed or not. Yes it is practically seen that Government officers are loaded with work so only those files are processed which are enquired by applicant. As such if no follow up then the file gets less priority and it steps down to bottom of the piled up files. Yes there should be provision of enquiry and the officer for this purpose should carry good knowledge and who can advise the visitors properly and thoroughly. Yes as you said generically the officer asks the applicant to submit the file and request to come on later day. The files moves to higher officer and he points out the deficiency in the application and thereby calls for the pending document by sending back the file to the lower officer. If the lower was aware of all the requirements then he would have advised at the time of filing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application by the applicant. Here, only lower officer cannot be held responsible because may be the higher officer would not have updated the new requirement of document to the lower officer. Thus the problem of delay processing. Many reasons may be cited but there is need for the provision of an officer who would help quide the applicant to get their money back. Thanks. Dated: 28-2-2017 Reply By krishna murthy as = 17. Must make habituation to the employees/family members as well as employers for the submission of necessary documents , KYC and keep the PF account properly, years together. 18. Must get the complete information about all the old and new employees and their family members , nominees , bank accounts and up date as a war foot basis. 19. When the employer delay in PF Contributions, the EPF department, collecting interest, penalties and some times imposing punishments. In the same way , when the claims delayed for the members due to EPF Department technical problems , The EPF Department must pay interest and penalties. And Officers concerned must be responsible for their delays. 20. There must be a Apex body to settle the complaints of members, like & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;Ombudsman' for Banks complaints, 'SEBI' for Financial Markets, 'IRDA' for Insurance complaints and 'TRAI' for Cell phones and Telephones complaints etc., I hope the higher authorities concerned may take necessary action to keep the EPFO transparent/Accountable and also take immediate steps to simplify the with drawl facility quickly i.e., with in hours like a Bank and Post office saving Bank Account with drawls. It is possible if the EPFO Department collects and maintains the members details in DIGITAL format. Krishna murthy M. Dated: 3-3-2017 Reply By krishna murthy as = 21. Must keep the CC cameras in all PF departments and watch the employees in coming timings out going timings, chit chatings and find why and where the bottlenecks are there in settlement of PF claims. And must take actions against negligence etc., ( To settle simple ' Superannuation settlement' the EPF department is taking more than 100 days. This type of delay , carelessness should not be repeated in future ) 22. When the EPF department introduces 100% Digital system, the department can save crores of rupees, by removing excess employees in EPF departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. And the same can be passed on to the employers. 23. Out of present EPF staff only , must appoint 2 or 3 employees to go around the companies and collect the employees information and help the employees if they require. And also help the employers to file PF returns properly and regularly without any problems. 24. Must treat the positive criticisers as the EPF advisers and do not treat them other way. 25. Higher authorities must take feed back from the members , EPF employees, employers and also ex members etc., Must check whether the higher authorities orders are implementing or not . And must see what actions to be taken at appropriate time. And try to implement the ideas of people, if these are good and possible. CLAIMING OF EPF/EPS AMOUNT MUST BE A MEMBERS RIGHT, BUT SHOULD NOT BE A REQUEST OR BEGGING Dated: 9-3-2017 - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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