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Business News/ Money / Personal Finance/  Changing your job? Shifting PF holdings to soon be hassle-free

Changing your job? Shifting PF holdings to soon be hassle-free

 EPFO is working on an ‘anywhere service’ plan to upgrade services to its subscribers
  • The new plan says that ETF units accrued as part of members’ EPF investments will also be transferred
  • Nearly 60% of EPFO accounts are linked with Aadhaar. (Bloomberg)Premium
    Nearly 60% of EPFO accounts are linked with Aadhaar. (Bloomberg)

    NEW DELHI : Employees who either shift jobs or move to new locations may soon be able to transfer their provident fund corpus with little interference from their employers.

    The Employees’ Provident Fund Organisation (EPFO) is working on a so-called “anywhere service" plan to upgrade service delivery to its 60 million active subscribers. Once it is implemented over the next six months, organized sector employees moving across locations are unlikely to face any problem in unifying their PF corpus, according to at least two government officials and documents reviewed by Mint.

    “EPFO, with an endeavour to improve the quality of service, wishes to launch an ambitious ‘anywhere service’ for its members," said one of the two officials, who declined to be named.

    The official said that though the universal account number (UAN) was already in place, it had several limitations as the back-end service delivery such as claims settlement and pension calculations were still handled at field offices.

    “With services delivery currently restricted to the field office where the account of the member belongs, multiple member IDs associated with a single person due to non-portability and double-entry accounting system are few of the issues EPFO is facing… To meet the end objective of better service delivery, EPFO desires an integrated system which runs on a centralized single database," the EPFO document said.

    The second official said the organization had already started upgrading its technology backbone and central database. He said processing of claims of members, which constitute the bulk of the back-office operations of EPFO, need to be strengthened and dependency on field offices to process such claims minimized.

    The first official said that since construction and textile workers were a highly floating group, such a move would help them unify their old accounts and improve their chances of receiving better pensions through the employee pension scheme.

    Every month, employees contribute 12% of their basic pay and dearness allowance to EPFO and a matching contribution is made by the employer.

    The first official said that when an employee joins a new job and mentions his old UAN number while making a fresh EPF contribution, his old PF and pension account deposits would be automatically transferred.

    This can be done without applying for a transfer or going to the previous employer. Unification of old accounts has two key benefits—the EPF contribution period becomes longer as older accounts get merged and, second, it improves the employee’s pension eligibility. Currently, 10 years of regular contribution is a must to get pension under EPS.

    According to official documents, online requests by members are currently processed at the back end through the EPFO application software by respective field offices. This application has limitations and design problems and is not in sync with the UAN website, resulting in deficiencies in performance and deliverables.

    “It is the need of the hour in view of high expectations of stakeholders for better automated services," the document says.

    The new plan envisages that the exchange-traded fund (ETF) units accrued as part of members’ EPF investments will also be transferred seamlessly.

    “Subscribers’ experience with EPFO must improve further. A clarity on ETF accumulation and transfer in case of job shift is the need of the hour and we support any attempt on this," said A.K. Padmanabhan, an employees’ representative on the central board of EPFO.

    However, he said that since all subscribers’ accounts were not linked to Aadhaar, the implementation of the plan could be challenging. Nearly 60% of current subscribers have linked their accounts with their Aadhaar number.

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    Published: 07 Mar 2019, 12:02 AM IST
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