BackEmployees Provident Fund to go realtime like online banking
The online transfer of accounts service is also ready to be rolled out by Oct, says the retirement fund manager
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New Delhi: As with one’s bank account, millions of employees will soon be able to see, update and manage their provident fund accounts online in realtime, addressing a problem that has been plaguing organized sector workers for decades, the Employees Provident Fund Organisation (EPFO) said on Friday.
“You won’t have to wait for the year-end to see an updated EPF account. It will be realtime," said K.K. Jalan, central provident fund commissioner. “We have adopted a new technology and shall complete the updation of all accounts (more than 120 million) in the next two weeks. After that it’s realtime."
“An employee can see his and his employer’s contribution soon after they are deducted and the interest accrued on it. As an employee what you want—(that) your retirement corpus is safe and it’s accessible like your bank account—that’s our aim too," the commissioner said.
Jalan said experts have tested the new system on two million accounts of some 1,000 organizations across India, and that the glitches have been ironed out. “We are totally satisfied. On realtime basis employees will know his/her corpus and (s)he can manage or withdrew it as per the requirements within rules."
The retirement fund manager said that processing of data for preparation of members’ accounts has been a tedious and time consuming exercise. While preparing annual account statements, at least six different forms need to be processed manually but now all that can be done in few hours, said V. Ranganath, a regional provident fund commissioner at EPFO.
Labour ministry-controlled EPFO has more than 120 million accounts; and over 40 million of them are active. The rest are inoperative accounts or those where no contributions have come in for the last three years. The organization manages a corpus of more than ₹ 5 trillion.
Labour ministry officials said the adoption of new technologies is helping the retirement fund manager to become customer-friendly. The speed with which claims are settled has improved significantly—in July alone over 98% of the claims (some 12 million) were settled in less than 30 days. Of the total claims settled, 70% were concluded in less than 10 days. “We want to provide quick and reliable service to customers," said K.Suresh, minister of state for labour and employment.
Jalan said that a remaining key concern was over online transfer of accounts, but this service too is ready to be rolled out by early October. “We have done this with over 1,200 organizations on a pilot mode. The field tests are satisfactory," he said.
Sanjay Kumar, the financial advisor and chief account officer of EPFO, said that two PF offices—South Delhi and Gurgaon—have conducted the pilot and that three more offices will be added at the trial stage. “The trial will be done in Hyderabad, Chennai and Mumbai PF offices before it is launched and the central PF commissioner has said that he is looking an October date for formally launching it," Kumar explained.
Customers seem to be happy with the new initiative.
“My office gives me a PF account slip once a year, and the general feeling is my PF deductions are going to a black box about which I don't know much. If I can access my account like my bank account it’s great," said Moses Phillip, a marketing executive in Gurgaon. “But the most important thing is online transfer of accounts, which is very important for the young working population. In a service economy, you will continue to see more job changes. Here nobody wants to lose money but EPF services are not very friendly. They need to give a permanent account to stay with an employee wherever he or she goes," Phillip said.
However, an industry expert said that what EPFO is doing is not foolproof. “Unless you have a central server, you cannot operate smoothly like online banking. That’s not there with EPFO so far," said the expert, who did not wish to be named.
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