A friendlier EPF

Not long ago, the Employees Provident Fund Organisation was reputed to be one of the most intransigent and inefficient government organisations. But in the last two years it has transformed into a service-minded entity that treats its contributing members as valued customers. The EPFO’s e-governance initiatives have wrought a sea change in its interaction with members, ushering in not just account portability but also a friendly online interface for withdrawals and claims.

The reformative measures are many. For one, with the issue of the Universal Account Number (UAN) to all contributing members, account portability has been enabled for employees who switch jobs. The lack of such portability had earlier deterred most employees from effecting PF transfers, giving rise to lakhs of inactive accounts. Two, the UAN has also helped establish a direct link between contributing members and the fund, thus dis-intermediating employer organisations from the equation. This is welcome, as disputes between the employer organisation and an employee can no longer stand in the way of claiming one’s retirement kitty. With the EPFO on the mobile platform, members can use SMS-based services for live account updates. Three, with the UAN portal now active, members with Aadhaar-seeded accounts have recently been allowed to apply for final settlement, partial withdrawal or pension benefits directly to the fund. The organisation has set itself tight deadlines for settlement of PF and death claims, at 20 and 7 days respectively. The worry, however, is that all these services are currently accessible only to a small proportion of EPFO members. Of the EPFO’s mammoth 17.1 crore account base, just 3.76 crore are contributing members; of these just 1.68 crore accounts are Aadhaar-seeded. So, for its e-governance initiatives to really make a difference to the vast majority of account-holders, EPFO must redouble its efforts to allot UANs to the owners of its 9 crore legacy inoperative accounts. On this score, given that its membership straddles different economic strata and regions, maybe a digital help desk alone isn’t enough and the EPFO needs physical outreach programmes.

It must also be kept in mind that e-governance initiatives alone will not transform the EPFO into a customer-friendly organisation. The next step should be more transparency on its mammoth investment operations. After all, having sunk a significant portion of their life savings into the fund, contributors to EPFO have a right to expect regular disclosures on the exact deployment of their monies and the investment returns earned. Here, the EPFO’s anachronistic system of ‘declaring’ its annual returns based on its accounting ‘surplus’ every year needs to be revamped on the lines of privately managed pension funds. It is time the EPFO worked towards better portfolio and performance-related disclosures based on assets and liabilities that are clearly marked to the market.

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