Personal Finance

A slew of investor-friendly moves

Parvatha Vardhini C | Updated on January 11, 2018

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Apart from simplifying claims and withdrawal, the EPFO has introduced account portability

After being in the news for the wrong reasons in early 2016, the Employees’ Provident Fund Organisation (EPFO) has made amends in the last year by becoming more investor friendly.

Apart from the rollback of unpopular announcements, the EPFO has put in place several measures to make claims and withdrawals easier.

It has also introduced account portability and higher benefits under the deposit-linked insurance scheme.

Simpler, quicker claims

The EPFO has simplified the existing procedures for final settlements on retirement/death, partial withdrawals and pension claims. First, the forms to be filled up for making these claims have been overhauled.

Earlier, you had to fill up Form 19 for complete withdrawal, or Form 10C to retain membership of the Pension Scheme or to claim withdrawals, and Form 31 for partial withdrawals. Rolling all these into one — a composite claim form — has been introduced now.

The new form allows you to approach the EPFO directly, by-passing your employer attestation, if your Aadhaar and bank account details are linked to your Universal Account Number (UAN). Chances are that your employer could have already given the bank account details and your Aadhaar to the EPFO to seed it with the UAN, if the details are available with them. If not, you can link these with your UAN at https://unifiedportalmem.epfindia.gov.in/memberinterface/ For those who are not tech savvy, there is a non-Aadhaar composite form which requires employer signature and more details such as date of birth, bank account and Aadhaar details. This is to help the seeding/linking process with your UAN. EPFO is also offering Aadhaar seeding through its offices and associated service centres.

Secondly, requirement of supporting documents have been done away with in some cases of part-withdrawals. EPF members are allowed part-withdrawals in circumstances such as purchase or construction of house, illness of self or family members or for education of children.

Members no longer need to submit medical certificate to get advances in case of illness. A self-declaration would do.

Differently-abled members will also get advance on the basis of self-declaration. Submission of proof for withdrawals in case of marriage of self or dependants has also been done away with. Besides, members can now withdraw up to 90 per cent of their corpus for buying or building a house or purchasing a site. But this is allowed only if the person is a member of a co-operative society or a housing society having at least 10 members of EPF.

Third, measures have also been taken to eliminate delays at various stages. While the process of requesting for transfer of EPF account from one employer to another was moved online sometime back, the EPFO will shortly move the claims/withdrawals process online too. This will eliminate the need for interaction of the member with the employer or the EPFO field office for this purpose, thus reducing delays. Payments through NEFT have been introduced. The EPF scheme is also speeding up its settlement time. It is aiming to settle any claim within 20 days of its receipt.

In addition, field offices of the EPFO have been directed to settle claims in case of death within seven days of receipt of such claims. Besides, steps are also being taken to settle retirement claims on the day of retirement itself.

Higher insurance benefits

In April this year, a proposal to increase death benefit for members of Employee Deposit Linked Insurance (EDLI) has been made. EDLI is funded by your employer who contributes 0.5 per cent of your Basic and Dearness Allowance (DA) each month.

The EPFO has recommended a minimum assured benefit of ₹2.5 lakh on the death of a EDLI member. Provision of loyalty-cum-life benefit to members on superannuation will also be undertaken on a pilot basis.

Portability

Finally, through the seeding of Aadhaar, PAN and bank account details with the UAN, the EPFO has also enabled easy portability of the account when an employee changes jobs.

With portability of EPF monies to the NPS announced earlier this year, steps are also being taken to set up a procedure for the same.

The government has already announced that any sum withdrawn from the EPF for the purpose of investing in the NPS will be tax-free. Usually, a withdrawal from an EPF account which has completed less than five years is taxed.

Published on May 20, 2017

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