EPFO to focus on subscribers’ convenience, ease of doing business through digital tools in 2020

Retirement fund body EPFO is set to focus on improving ease of living for workers (subscribers) and ease of doing business for employers in 2020, mainly through digital tools in its pursuit to become a paperless organisation eventually. Employees’ Provident Fund Organisation (EPFO) is undertaking several digital initiatives including online Universal Account Number (UAN) generation facility for subscribers and e-inspection system for employers.

“EPFO has focus on two major initiatives during the year 2020. The first initiative is to further promote ease of living for workers. The second initiative is targeted at promoting ease of doing business for employers,” Central Provident Fund Commissioner Sunil Barthwal told PTI. Citing an example Barthwal said online UAN generation facility has been provided to all workers having valid KYC documents. This platform will also ensure that no eligible worker is deprived of social security benefits.

Similarly for employers, Barthwal said EPFO is planning to do away with the physical submission of documents and visit of an inspector, and is piloting an e-inspection system. The e-inspection form will be available on portal of employers where reasons for non-filing can be given to avert physical inspections. In a bid to improve ease of living for pensioners, another digital initiative that was taken this year was EPS Pensioners’ PPO (pension payment order) in DigiLocker website/Application (APP).

Following this, pensioners do not need to carry physical PPO. They can show the digital form of PPO on their mobile phone or website to authenticate their credentials as pensioner. In a major decision, the EPFO’s apex decision making body Central Board of Trustees headed by Labour Minister approved crediting 8.65 per cent rate of interest on accumulations in the EPF member’s account for 2018-19. This was later ratified by Finance Ministry for crediting the interest into over 6 crore subscribers of the EPFO.

The rate of interest for a fiscal is decided before beginning of financial year as per the EPF Scheme 1952. EPFO still has to work out the rate of interest for 2019-20, which should have been enforced before April 1, 2019. In another important decision, the EPFO trustees approved amendment in Employees’ Pension Scheme (EPS) 1995, for restoration of commuted value of pension to the pensioners after 15 years of drawing commutation which will benefit around 6.3 lakhs pensioners.

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EPFO also launched the revamped EPFIGMS 2.0 version which will benefit more than 5 crores subscribers and lakhs of employers by speedy and smooth resolution of grievances. This year, EPFO also decided allocation of investment in Nifty 50 and Sensex. Its trustees approved the proposal that the fund allocation between Nifty 50 and Sensex ETFs be divided evenly — in 50:50 ratio.

The body also approved appointment of UTI AMC and SBI Mutual Fund as its fund managers for three years from October 1, 2019. The appointment of the fund managers for another term of three years had been pending with the EPFO since April 2018. The body had appointed SBI, ICICI Securities Primary Dealership, Reliance Capital, UTI AMC and HSBC AMC for three year, starting April 1, 2015. Later the fund managers were given extensions till September 30, 2019.

EPFO had appointed multiple fund managers for the first time in July 2008, for earning better rate of return on deposits for its subscribers. Before that, SBI was the sole fund manager for the retirement fund body since its inception in 1952. Besides, it also approved early redemption of its investment of around Rs 700 crore in bonds of troubled Dewan Housing Finance Corporation Ltd (DHFL). However, EPFO has been dragging the proposal to double minimum monthly pension Rs 2,000 under the Employees’ Pension Scheme, 1995, amid demand of even higher minimum pension from trade unions.

EPFO also obtained Legal Entity Identifier Code (LEI) for participation in non-derivative markets by EPFO. In November 2018, the Reserve Bank Of India (RBI) issued advisory to all eligible market participants in the financial markets to obtain LEI Code. The trustees approved the nomination of the EPFO officers as the authorised officials to obtain LEI Code. The retirement fund body also decided to withhold any further investment in private sector companies bonds and to compulsorily consider one of the two required ratings necessarily from CRISIL, CARE, ICRA & India Ratings for investments in PSU Bonds category.

Source: Financial Express