The EPFO (Employees’ Provident Fund Organisation) will soon give subscribers a unique account number that will operate independent of employers and benefit millions of people holding jobs.
The PF number portability may be by the end of this year.The number will be given to the employees independent of their employer
EPFO is working to make the system employee friendly and this number portability is a huge positive for the workers.
EPFO, a statutory agency under the labour ministry, has 4.4 active crore subscribers and manages a corpus of more than Rs. 3.5 lakh crore and receives incremental deposits ranging between Rs. 25,000 crore and Rs. 30,000 crore every year.
PF account holders currently create fresh accounts every time they change jobs because the process of carrying forward the old accounts is considered to be cumbersome and tedious, and is frowned upon by human resource departments of many organizations.
As a result, EPFO manages minimum 9.53 crore accounts, out of which only 4.4 crore are active. Inactive accounts stop earning interest 3 years after the last contribution and add to the paperwork and maintenance workload of the fund managers.
At least 80% of the current workload at EPFO can be reduced if shift to account portability. As per PF ofice internal calculations, it has the potential to save some Rs. 720 crore per year.
The EPF accounts will be linked to the National Population Registry, or the PAN (permanent account number) issued by the income-tax department, or the UID (unique identity) number. EPFO close to finalise plan to provide portable provident fund account numbers to organised workers
The computerized PF unique account number system would entail an initial investment of nearly Rs. 200 crore.
Above 80% of PF office workload would come down as we do not have to spend time towards claim settlement.
The EPFO hopes that cases of premature withdrawal will recede once the portable number is implemented.
Above 30 % subscribers withdrew their PF within a year of joining service while 54.3% did so by the end of the second year.
The EPFO Organisation processes more than 60 lakh claims every year.
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