EPFO to start online service for transfer claims next month

New Delhi: The Employees' Provident Fund Organisation (EPFO) is all set to start online transfer of provident fund accounts in the first half of October, a move that will benefit over 13 lakh applicants every year.

"We have completed live testing of online transfer of PF accounts facility. We are in a position to launch the service any time. The facility will definitely be launched during the first fortnight of October," K K Jalan, Central Provident Fund Commissioner of the retirement fund body, said on Friday.

The EPFO is planning the launch after the new Labour Secretary takes over on October 1, according to a source. Once it starts, provident fund (PF) subscribers who have changed jobs can apply online for transfer claims through their employers.

A central clearance house has been set up for this purpose and the body plans to reduce the time for transfer of PF accounts to three days through the online service.

The EPFO started registering digital signatures of companies from July 25, a prerequisite for the facility.

"Over 25,000 employers or establishments have already registered their digital signatures with us," Mr Jalan said.

"About 80 per cent of the firms employing more than 500 workers have registered their digital signatures with us."

According to Mr Jalan, job changes are more frequent in firms employing more than 500 workers, especially in sectors such as information technology. The body managed PF accounts of about 6.9 lakh establishments in 2011-12.

The body says it's easier for companies in sectors such as IT to register digital signatures as they already maintain them to comply with Corporate Affairs Ministry requirements.

During 2012-13, the retirement body settled 107.62 lakh claims, 88 per cent of which were processed within 30 days, as prescribed by the body's citizen charter.

The EPFO expects 1.2 crore claims in 2013-14, including around 13 lakh PF transfer claims. It plans online settlements of about 10 lakh transfer claims of tech-savvy applicants from industries such as IT this fiscal year.

Now on, know your current PF balance instantly

The Employees Provident Fund Organisation (EPFO) today launched an online facility which will enable its over 5 crore subscribers to view their updated provident fund balance without waiting for their annual PF account slips.

The subscribers can now track their accounts online on a real-time basis and also take a printout of their records here.

While the site claims to have been updated today, it showed data till March 2012 when tested on a PF account. The EPFO officials could not be reached despite repeated attempts by NDTV.

At present, subscribers get account PF statements once a year. The Employees Provident Fund Organisation (EPFO) is supposed to dispatch annual provident funds account slips by September. But the process usually takes longer.

For the period starting April this year, subscribers will be able to see only the amounts credited to their accounts every month but not the interest credited. The rate of return on PF deposits for this fiscal has not been announced yet.

The new online facility will also be available to subscribers with inoperative accounts. The EPFO makes accounts inoperative when a contribution is not made for 36 months in a row.

EPFO's Central Provident Fund Commissioner K K Jalan said that subscribers would also get the facility for making online PF account transfer claims from next month.

Every year, the EPFO receives about 1.2 crore claims, including transfer, pension and withdrawal of Provident Fund. Jalan also said that the EPFO is making efforts to settle all types of claims in less than three days as against the prescribed 30-day period.

Govt considers PF cap hike in boost to salaried employees

The government may hike the threshold salary limit for provident fund contributions in a move that will bring cheer to millions of employees in the private sector. According to current norms, contribution towards provident fund is mandatory for those employees, whose salary is up to Rs. 6,500.

A hike in salary limit will not only help more people contribute toward their retirement benefits, but will also enable the Employee Provident Fund Organization (EPFO) to draw more long-term savings into its kitty. EPFO is a statutory body that manages provident fund contributions.

(Also read: Now on, know your current PF balance instantly)

Higher provident fund contributions will also help the government to lower its borrowing cost. At present, the EPFO invests a sizable amount of its kitty in government securities.

The Rs. 6,500 limit for PF contribution was last revised in 2001.

According to the current norms, 12 per cent of an employee's salary is contributed towards provident fund account. Another 12 per cent is contributed by the employer.

(Also read: EPFO to start online service for transfer claims soon)

Out of the 24 per cent around one-third of the total provident contribution (8.33 per cent of salary) goes toward employee's pension scheme. The government contributes 1.16 per cent of the overall salary towards the pension scheme as a subsidy.

The government had recently made more people eligible to avail healthcare benefits under the Employees' State Insurance (ESI). Earlier, workers with monthly salary up to Rs. 15,000 were eligible for ESI benefits. Now the salary cap has been increased to Rs. 25,000, making for people eligible for ESI benefits.

Every month, eligible employees contribute 1.75 percent of their salary and employers contribute 4.75 percent toward the ESI corpus.