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The Government is working on a plan to provide, in one year’s time, a unique provident fund number to more than five crore organised sector employees. The number will remain unchanged even if one changes his or her job.
The Employee’s Provident Fund Organisation (EPFO) has sought help from the country’s premiere professional institutes, Indian Institute of Technology and Indian Institute of Management, for executing the time-bound programme.
“We are looking at a short-term plan that we could implement in just a few months to help employees seamlessly transfer their accounts from one organisation to another. In the longer term, which is about a year, we want to create a Central data base of all accounts and give a unique number to each subscriber,” Anil Swarup, Additional Secretary, Labour Ministry, told Business Line .
Of the five crore subscribers of the Government’s Employee’s Provident Fund (EPF) scheme, lakhs change jobs every year and face the problem of transferring deposits from the PF accounts they held in their former organisations to the new accounts.
Applications for transfer of accounts often get stuck at various points forcing the employee to run from pillar to post.
“We recognise the need to act fast and that is why we have come up with the two-pronged strategy in consultation with experts from IIT Delhi and IIM Ahmedabad,” said Swarup, who is also the Central Provident Fund Commissioner.
For the short term, the EPFO would put in place a monitoring system, within a couple of months, to get periodic information on the number of applications coming for transfers. “The onus will shift from the worker to the employer for transferring accounts and it will be done in a time-bound manner,” Swarup said.
The EPFO would simultaneously work on its long-term strategy of developing a Central data base that would house information related to all accounts currently held at different regional offices. Once information on all accounts is in one place, no matter where the employees move, they can keep maintaining one account.
All that they have to do is give their new employers their unique account number and contributions can start flowing from the new office to the old account.
“There is a lot of work to be done. We have to look for appropriate software and customise it. Other aspects of data transfer, maintenance etc also need to be sorted out,” Swarup said.
More than Rs 3.5 lakh crore is held by the EPFO as retirement savings for organised sector employees. Workers contribute 12 per cent of their basic salary to the fund while employers deposit a matching amount.
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