Employees' Provident Fund Organisation

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Employees' Provident Fund Organisation
Native name
कर्मचारी भविष्य निधि संगठन
Type Statutory Body
Founded4 March 1952 (1952-03-04)
Headquarters
Bhavishya Nidhi Bhawan, 14, Bhikaiji Cama Place,
New Delhi
,
India
Key people
[ Mukhmeet Singh Bhatia ] (Central Provident Fund Commissioner)

= *Provident Fund

  • Implementing agency for Bilateral Social Security Agreements
AUM 11 lakh crore (US$150 billion)
Owner Ministry of Labour and Employment, Government of India
Website epfindia.gov.in

[1]

The Employees' Provident Fund Organisation (EPFO) is the statutory body under the ownership of Ministry of Labour and Employment, Government of India that is responsible for regulation and management of provident funds, pensions and the mandatory life insurance in India. The EPFO administers the mandatory provident fund and the mandatory pension and life insurance schemes for the Indian workforce. It also manages social security agreements with other countries. International workers are covered under EPFO plans in countries where bilateral agreements have been signed. As of May 2021, 19 such agreements are in place. [2] The EPFO's apex decision making body is the Central Board of Trustees (CBT), [3] [4] a statutory body established by the Employees' Provident Fund and Miscellaneous Provisions Act, 1952. [5] As of 2018, more than 11 lakh crore (US$157.8 billion) are under EPFO management. [6]

Contents

On 1 October 2014, the Government of India launched a Universal Account Number for Employees covered by EPFO to enable Provident Fund number portability. [7]

Origins

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 creating 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 for industrial workers should be undertaken. The Coal Mines Provident Fund Scheme was launched in 1948. The success of this fund led to demand for its expansion to other industries.

The Constitution of India enacted in 1950 a non-justiciable directive that the State shall, within the limits of its economic capacity, make effective provisions for securing the right to work, to education and to public assistance in cases of unemployment, old-age, sickness & disablement and undeserved want.

Accordingly, the last months of 1951 witnessed the promulgation of the Employees' Provident Funds Ordinance. The Ordinance promulgated on 5 November 1951 was replaced by the Employees' Provident Funds Act, which extended to the whole of India except Jammu and Kashmir. The Employees' Provident Funds Scheme, framed under section 5 of the Act, was introduced in stages and came into force in its entirety by 1 November 1952. The cement, cigarette, electric, mechanical and general engineering products, iron, steel, paper, and textile industries were affected by the Act. The Acts and Schemes framed under it are administered by the Central Board of Trustees, which consists of representatives of central and state governments, employers, and employees. The Board administers a contributory provident fund, pension scheme and an insurance scheme for the workforce engaged in the organized sector in India. [8] The board is chaired by the Union Labour Minister of India.

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 (replacing the Employees' Family Pension Scheme, 1971)

Recent Developments

On 5 March 2020, the EPFO lowered the interest rate on employee provident funds to 8.50% for 2019-20, [9] from 8.65%. [10] The EPFO has retained the interest rate of 8.50% for the fiscal year of 2020-21.

Structure

The EPFO has the 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 the Central Board of Trustees. 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 the 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 the 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 the 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 that are headed by an Additional Central Provident Fund Commissioner. At present, there are ten Zones across India. The states have either one or more than one Regional Offices headed by Regional Provident Fund Commissioners (RPFC) (Grade I) which are again sub-divided into Sub-Regions headed by Regional Provident Fund Commissioners (Grade II). 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 (Enforcement Officers/Accounts Officers) are also recruited directly in addition to promotion from the staff cadre of social security assistants.

Universal Account Number

The Universal Account Number (UAN) is a 12-digit number allotted to employees who are contributing to EPF. It will be generated for each of the PF members by EPFO. The UAN acts as an umbrella for the multiple Member IDs allotted to an individual by different establishments and remains the same throughout the lifetime of an employee. It does not change between jobs. The idea is to link multiple Member Identification Numbers (Member Id) allotted to a single member under a single UAN. This will help the member to view details of all the Member Identification Numbers (Member Id) linked to it.

The major benefit of UAN includes convenience when tagging multiple Member IDs of a single employee. The UAN helps with transfer and withdrawals of PF claims, online or offline. Along with these services like the Online Pass-Book, SMS services on each deposit of contribution and online KYC updates can be provided based on UAN number. One can transfer the balance from one EPF to another EPF account with the help of UAN. [11]

There is a new UAN portal which can check EPF balance and UAN status, [12] download UAN EPF passbook, [13] check EPF balance, provident fund claim, and many more facility provided by new UAN portal.

EPFO has started to provide refunds for Administrative charges, if KYC details are up to date for all employees. [14] This incentive program was announced to be implemented in the years 2016-2017.

A member who is unable to withdraw PF for any reason can withdraw without the consent of an employer. They can submit FORM 19 for EPF (Employees Provident Fund) and FORM 10C for EPS (Employees’ Pension Scheme) to the EPFO office in which their EPF account is maintained. [15]

A UAN provided by EPFO is mainly used to track PF balance and PF claim status.

Employee's Provident Pension

The Employee's Pension Scheme (EPS) has been controlled by the Employee's Provident Fund Organization (EPFO) since 1995. The main advantage of this scheme is to provide social security to its PF members. Under this scheme, employees working in the organized sector can gain pension benefit after reaching age 58. This EPS applies to both new members and existing members.

Related Research Articles

In the United States, a 401(k) plan is an employer-sponsored defined-contribution pension account defined in subsection 401(k) of the Internal Revenue Code. Employee funding comes directly off their paycheck and may be matched by the employer. There are two types: traditional and Roth 401(k). For Roth accounts, contributions and withdrawals have no impact on income tax. For traditional accounts, contributions may be deducted from taxable income and withdrawals are added to taxable income. There are limits to contributions, rules governing withdrawals and possible penalties.

Pension Retirement fund

A pension is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments. A pension may be a "defined benefit plan", where a fixed sum is paid regularly to a person, or a "defined contribution plan", under which a fixed sum is invested that then becomes available at retirement age. Pensions should not be confused with severance pay; the former is usually paid in regular amounts for life after retirement, while the latter is typically paid as a fixed amount after involuntary termination of employment before retirement.

Pension fund Plan, fund, or scheme which provides retirement income

A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides retirement income.

Central Provident Fund Statutory board administering national savings and pension plan

The Central Provident Fund Board, commonly known as the CPF Board or simply the Central Provident Fund is a compulsory comprehensive savings and pension plan for working Singaporeans and permanent residents primarily to fund their retirement, healthcare, and housing needs in Singapore.

In Australia, superannuation, or just "super", is compulsory for all people who have worked and reside in Australia. The balance of a person's superannuation account, or for many people, accounts, is then used to provide an income stream when retiring. Federal law dictates minimum amounts that employers must contribute to the super accounts of their employees, on top of standard wages or salaries.

Defined contribution plan

A defined contribution (DC) plan is a type of retirement plan in which the employer, employee or both make contributions on a regular basis. Individual accounts are set up for participants and benefits are based on the amounts credited to these accounts plus any investment earnings on the money in the account. In defined contribution plans, future benefits fluctuate on the basis of investment earnings. The most common type of defined contribution plan is a savings and thrift plan. Under this type of plan, the employee contributes a predetermined portion of his or her earnings to an individual account, all or part of which is matched by the employer.

The Mandatory Provident Fund, often abbreviated as MPF (強積金), is a compulsory saving scheme for the retirement of residents in Hong Kong. Most employees and their employers are required to contribute monthly to mandatory provident fund schemes provided by approved private organisations, according to their salaries and the period of employment.

KiwiSaver New Zealand savings scheme

The KiwiSaver scheme, a New Zealand savings scheme, came into operation from Monday, 2 July 2007. Participants can normally access their KiwiSaver funds only after the age of 65, but can also use them as a deposit for a first home.

Employees Provident Fund (Malaysia)

Employees' Provident Fund is a federal statutory body under the purview of the Ministry of Finance. It manages the compulsory savings plan and retirement planning for private sector workers in Malaysia. Membership of the EPF is mandatory for Malaysian citizens employed in the private sector, and voluntary for non-Malaysian citizens.

The Public Provident Fund (PPF) is a savings-cum-tax-saving instrument in India, introduced by the National Savings Institute of the Ministry of Finance in 1968. The aim of the scheme is to mobilize small savings by offering an investment with reasonable returns combined with income tax benefits. The scheme is fully guaranteed by the Central Government. Balance in PPF account is not subject to attachment under any order or decree of court. However, Income Tax & other Government authorities can attach the account for recovering tax dues.

Social security is divided by the Indian government into seven branches: healthcare and medical insurances; old age/retirement benefits; unemployment insurance; life and disability insurance; maternity and childcare benefits; rural job guarantee; and food security. The Central Government of India's social security and welfare expenditures are a substantial portion of the official budget and as well as the budgets of social security bodies, and state and local governments play roles in developing and implementing social security policies. Additional welfare measure systems are also uniquely operated by various state governments. The government uses the unique identity number (Aadhar) that every Indian possesses to distribute welfare measures in India. The Code On Social Security, 2020 is part of the Indian labor code that deals employees' social security and have generous provisions on retirement pension, healthcare insurance and medical benefits, sick pay and leaves, unemployment benefits and paid parental leaves. The largest employment related social security programs backed by The Code On Social Security, 2020 are the Employees' Provident Fund Organisation for retirement pension, provident fund, life and disability insurance and the Employees' State Insurance for healthcare and unemployment benefits along with sick pays. There is also the National Pension System which is increasingly gaining popularity. These are funded through social insurance contributions on the payroll. While the National Food Security Act, 2013, that assures food security to all Indians, is funded through the general taxation.

A Personal Retirement Savings Account (PRSA) is a type of savings account introduced to the Irish market in 2003. In an attempt to increase pension coverage, the Pensions Board introduced a retirement savings account, that would entice the lower paid and self-employed to start making some pension provision. The intention was for PRSAs to supplement any State Retirement Benefits that would be payable in years to come.

National Pension System Trust is a specialised division of Pension Fund Regulatory and Development Authority which is under the jurisdiction of Ministry of Finance of the Government of India. The National Pension System (NPS) is a voluntary defined contribution pension system in India. National Pension System, like PPF and EPF is an EEE (Exempt-Exempt-Exempt) instrument in India where the entire corpus escapes tax at maturity and entire pension withdrawal amount is tax-free.

India operates a complex pension system. There are however three major pillars to the Indian pension system: the solidarity social assistance called the National Social Assistance Programme (NSAP) for the elderly poor, the civil servants pension and the mandatory defined contribution pension programs run by the Employees' Provident Fund Organisation of India for private sector employees and employees of state owned companies, and several voluntary plans.

Department of Labour and Employment (Tamil Nadu)

The Department of Labour and Employment of state of Tamil Nadu is one of the Department of Government of Tamil Nadu

Employees Provident Fund Nepal is the pension fund/provident fund for employees of government and private sector of Nepal. The Fund is currently managing provident funds of 600,000 employees working for the government and in the private sector. The Fund also invests in different sectors like infrastructures and hydroelectricity. The Fund distributes its profit among depositors. Currently employees are required to contribute 10% of their basic salary with an equal contribution from their employer to their provident fund.

The Employees' Provident Fund, abbreviated to EPF, is a social security scheme of employees in Sri Lanka under the Central Bank of Sri Lanka. It was established under Act No. 15 of 1958 by S. W. R. D. Bandaranaike, and as of December 2010, it had Rs 899.6 billion, which is equivalent to 16% of the GDP. The EPF offers a joint action plan by the employer and the employee to save money by targeting retirement and future to the government as well as the private sector. EPF invests in most Sri Lankan private companies such as Vallible One and Commercial Bank of Ceylon.

Coal Mines Provident Fund Organisation (CMPF) is an agency of the Indian government established in 1948 under The Coal Mines Provident Fund and Miscellaneous Provisions Act 1948. It serves as the official pension fund of coal miners and is financed by coal producers on a per-tonne basis. The fund pays the pensions of about 500,000 former coal miners, and has been considered financially precarious since 2017.

National Social Security Fund (Tanzania)

The National Social Security Fund (NSSF) is the government agency of Tanzania responsible for the collection, safekeeping, responsible investment, and distribution of retirement funds of all employees in all sectors of the Tanzania economy that do not fall under the governmental pension schemes. There are two other pension fund organizations in the country; the Public Service Pensions Fund for all employees working directly under the government and the Parastatal Pension Fund for all employees working under governmental parastatals.

Shram Suvidha is a Web Portal to provide a single platform for all labour compliances.

References

  1. "Tye, Alan Peter, (born 18 Sept. 1933), Partner, Tye Design (formerly Alan Tye Design (Industrial & Product Designers)), since 1962", Who's Who, Oxford University Press, 1 December 2007, doi:10.1093/ww/9780199540884.013.u38307 , retrieved 23 September 2021
  2. "EPFO -- International Workers". www.epfindia.com.
  3. PTI (18 March 2016). "Interest rate on Public Provident Fund cut to 8.1% from 8.7%". The Economic Times . Retrieved 18 March 2016.
  4. PTI (18 March 2016). "EPFO to invest more in government bonds amid corporate loan defaults". The Economic Times . Retrieved 18 March 2016.
  5. "EPFO data shows 9.73 lakh jobs created in September, highest in past 13 months". www.businesstoday.in. Retrieved 16 December 2016.
  6. Asher, Mukul (15 March 2018). "There is a need for NPS and EPFO to shape up". livemint.com. Retrieved 15 August 2021.
  7. "PM Narendra Modi unveils labour reforms; launches Universal Account Number for employees". The Economic Times. 16 October 2014.
  8. "Employees' Provident Fund India".
  9. "EPFO Declares 8.50% interest Rate for 2019-20". Naya India. 21 February 2018. Archived from the original on 23 February 2018. Retrieved 22 February 2018.
  10. "EPFO cuts interest rate to 8.50 % for 2019-20 from 8.65% for 2018-19". The Economic Times. 22 February 2018.
  11. Motiani, Preeti (13 January 2020). "How to transfer your EPF account online". The Economic Times. Retrieved 14 April 2020.
  12. "uan Registration & activation status procedure". epfuanlogin. 30 April 2018.
  13. "3+ ways to know your EPF Balance with uan & mobile". epfuanlogin.com. 30 September 2018.
  14. "EPFO UAN Member portal Login registration features passbook etc - UAN Login Unified Portal UAN Member portal login". UAN Login Unified Portal UAN Member portal login.
  15. https://www.epfuanlogin.com/download-uan-card/ Download UAN Card