New Delhi: Employees will no longer need the approval of their employers to withdraw money from their Employees Provident Fund (EPF) corpus.
If details such as Aadhaar unique identity number and bank account number have been linked to the EPF universal account number (UAN) and their know-your-customer (KYC) verification has been done by the employer, then the employees can avail themselves of the benefit of this hassle-free initiative immediately, the Employees Provident Fund Organisation (EPFO) said on Tuesday.
The state-run retirement fund manager also issued an order on Tuesday to all its field offices across India, instructing them to give effect to the order immediately.
In its quest to make EPFO a more subscriber-friendly organization, the retirement fund manager had delinked the employer from the process, central provident fund commissioner K.K. Jalan said.
Currently, employees need the approval of their employers to withdraw their EPF corpus, leading to unwanted delays on occasion.
Many employees have complained to the EPFO that organizations at times use their approval powers as a tool to harass them.
“Employees whose details like Aadhaar number and bank account number have been seeded into their UAN and whose UAN has been activated, may submit claims in Form 19, Form l0C and Form 31 directly to the commissioner without attestation of their employers, in such form and manner as may be specified by the central provident fund commissioner, for fast settlement of claims," the EPFO order dated 1 December said.
Since October 2014, the government has allowed EPF number portability through UAN.
All active EPF subscribers have been allotted a UAN which needs to be linked to his Aadhaar and bank account numbers.
The employer verifies the details and approves the KYC details through a digital signature.
But in the past one year, not all EPF subscribers have activated their UAN on the EPFO portal, largely due to three key reasons—lack of awareness, pending KYC and lack of digital signature.
Of the over 40 million active subscribers, only 21 million have activated their UAN, as per data available with the labour ministry.
EPFO authorities said the simplified withdrawal process will work as a catalyst to persuade more employers to get their KYC done and activate their UAN.
“As a retirement fund body, we are now focusing on our subscribers. We are turning subscriber-friendly and hope more people can take benefit from it," said Jalan, adding that as the corpus and the subscriber base grows, EPFO will continue to adopt new practices.
EPFO has a corpus of more than ₹ 8 trillion— ₹ 6 trillion directly under it and another ₹ 2 trillion with exempted trusts and company trusts who manage their own EPF under the direct supervision of the EPFO. The corpus has been growing by 15% every year for the last couple of years.
Sharad Patil, secretary general of Employers Federation of India, said that the move looks “logical". “If the withdrawal happens through Aadhaar and bank account, it will reduce the settlement period and also cut down the chance of corruption in the EPFO," Patil said.