Photo: Mint
Photo: Mint

Important tasks cut out for new EPFO commissioner

We ask experts the important tasks cut out for the EPFO's new commissioner Sunil Barthwal

EPFO has got a new commissioner. Sunil Barthwal, former joint secretary at the Department of Economic Affairs, has taken charge. We ask experts the important tasks cut out for the new commissioner.

Sonu Iyer, tax partner and people advisory services leader, EY India

Over the past few years and especially under the Central Provident Fund Commissioner (CPFC), V. P. Joy, the EPFO has ushered in multiple reforms—both in its internal functioning and in its dealings with key stakeholders, the employers and employees.

The EPFO has really focussed on the digital agenda with the following initiatives:

a. Online monthly PF returns for private trusts

b. Online PF settlements

c. Online linking of Universal Account Number (UAN) with Aadhaar of employees

d. Auto transfer of PF account on change of employment

e. Launch of new mobile application, UMANG

A simple monthly reporting of performance evaluation of private provident fund trusts, which scores and ranks trusts over six compliance parameters, is a good idea that ensures provident fund compliance remains a strong focus area of every employer and employee interests are well protected. Moving on, the EPFO needs to continue on this journey of progressive reforms and some of the suggestions for the new EPFO head will be: 

1. Monitor ease of withdrawals for subscribers

2. Quick resolution of PF related litigation

3. Training and awareness amongst EPFO workforce, officers and staff alike

4. Clarity in regulations for ease of implementation

5. An annual audit using digital technology, to provide comfort to both employers and employees

6. Seek feedback from subscribers or beneficiaries.

Amit Gopal, vice-president, IndiaLife Capital Pvt Ltd

Good pension fund bosses are like good football managers. They combine tactical sense with strategic vision. An absence of either can be disastrous. Ask the managers of Argentina, Spain and Germany.

For a few years now, the EPFO has tended to focus on the tactical, with strategic aspects getting a miss. A degree of rebalancing is overdue. Here is a list of four focus areas for the new CPFC.

1. Recast the EPF Act. It is universally accepted that the PF Act needs a makeover. In its current form, it under-represents the aspirations of the workforce. While welcome changes in delivery are underway, the one-size-fits-all approach in the benefit design needs change.

2. Rethink the role of the employer. For long, employers in India have been typecast as the villainous ‘Seth ji’ of Bollywood, defrauding his employees off their provident fund. Times have changed. Governance and compliance has increased. A more collaborative relationship between employers and the EPFO would be welcome.

3.Manage the technology transformation. The technology transformation at the EPFO, while welcome, needs wider stakeholder engagement. Employers and employees, alike have faced issues arising out of constant changes in the tech platform. Better project management will help.

Rituparna Chakraborty, co-founder, Teamlease

Sunil Barthwal is walking into the august shoes of V.P. Joy, who had brought about significant technological and procedural changes. However, in continuance with some of the good work done in the past, there is a need to focus on some pressing issues, which are becoming a hindrance to ease of doing business and rapid formalisation of the workforce.

It's key to find a solution, which is overdue, relating to issues arising out of Aadhaar not available or not matching with earlier data input, leading to delays in remittance, and in turn, to interest and penalty under sections 7A and 14B (The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952). Employers are genuinely not able to overcome this lacuna and hence the urgency. This may allow the employers to remit dues of such cases into an escrow account and suggest the way forward for resolution. This will enable employers to remit the contributions on time and avoid non-compliance, notices or appeals. Under the PMRPY (Pradhan Mantri Rojgar Protsahan Yojana) disbursement of past benefits (effective from 1 August 2016) needs to streamlined to keep employers motivated.

Also, there has to be greater transparency around how monthly pension amounts are determined. Incentives for private sector employees to be part of the employee pension scheme need to be defined. Performance, scalability and usability of the portal at scale should be a technological priority to ensure ease of doing business and complete digitisation of the nomination form (which is still done through hard copy) is an absolute necessity. Lastly, a continued representation to the government to exempt the PF Scheme from the Senior Citizen Welfare scheme in the interest of ex-employees and PF account holders.

Chitra Jayasimha, consulting actuary and founder, Universal Actuaries and Benefit Consultants (UABC)

Prior to the launch of Universal Account Number (UAN is a 12-digit unique number given by EPFO to its members) on 1 October 2014, all EPFO activities were physical where employees had to complete multiple forms for various activities including final settlement and withdrawals. This was a tedious process leading to delays in settlements and sometimes visits to EPFO office to sort out the issues.

UAN effectively digitised most EPF activities for the employees. Employees could merge all their accounts under a single umbrella, make online applications for EPFO services , apply for claims and transfer EPF balances from one account to another online without intervention of employers, and most importantly, view the passbook online.

While EPFO has come a long way from the earlier pre-digitization era, there are still a number of gaps and inconveniences to employees. For example, incorrect balances, incorrect transfers and various other EPFO issues are still to be effectively addressed online. Though there is a grievance management system where an employee can register her grievance giving the relevant details, the system is not very efficient and the grievance rarely gets sorted based on the complaint registered 0. The employee effectively reaches out to the employer for getting her issue sorted. 

Given the recent Supreme Court judgement on the EPS on higher pension, there is still confusion prevailing in the minds of employees as to whether they can make higher contribution to the EPS at 8.33% of full salary without any cap to be able to be receive higher pension post retirement. 

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