Coronvirus: EPFO to accept Aadhaar as birth proof online from subscribers

Retirement fund body EPFO will accept online its subscribers' Aadhaar card as valid proof to rectify their date of birth to ensure that the account is KYC compliant, the labour ministry said on Sunday.

"In a move to extend the availability and reach of online services in the wake of the COVID-19 pandemic, the EPFO (Employees' Provident Fund Organisation) has issued revised instructions to its field offices to facilitate PF members to rectify their date of birth in EPFO records, thus ensuring that their UAN is KYC compliant," a ministry statement said.

According to the statement, the date of birth recorded in Aadhaar will now be accepted as valid proof of date of birth for the purpose of rectification, provided that the difference in the two dates is less than 3 years.

The PF subscribers can submit the correction requests online.

It said that this will enable the EPFO to validate the birth date of members online with Unique Identification Authority of India (UIDAI) instantaneously, thus authenticating and reducing the processing time of change requests.

ALSO READ: Life insurance policyholders get 30 days more to pay premium amid lockdown

The EPFO has instructed field offices to expedite disposal of online requests, enabling Provident Fund members in financial distress, to apply online for availing non-refundable advance from their PF accumulations to tide over COVID-19 pandemic.

Earlier, the EPFO allowed its subscribers to withdraw three months basic pay and dearness allowance as non-refundable advance on the ground of COVID-19 lockdown from March 28, 2020.

However, the facility was available to those members whose KYC (Know You Customer ) compliance was complete.

Now, this decision would help the members to make their universal account numbers KYC compliant.

EPFO cuts rate on employee provident fund to 7-year low of 8.5% for FY20

The Employees’ Provident Fund Organisation (EPFO) on Thursday decided to slash the interest rates on provident fund savings of formal sector workers to a seven-year low of 8.5 per cent for the year 2019-20.

The EPFO had given an interest rate of 8.65 per cent in the previous financial year to roughly 170 million subscribers.

The decision was mainly because of two reasons: EPFO getting a lower rate of return on its investments in government securities and the body’s view to keep higher surplus owing to economic uncertainties, two people who were part of the deliberations said.

The decision was taken at the EPFO’s central board of trustees (CBT) meeting chaired by Labour and Employment Minister Santosh Kumar Gangwar.

The interest rate will be notified by the labour ministry after getting approval from the finance ministry. The interest rate on EPF savings will be the lowest since 2011-12 when it stood at 8.25 per cent. In 2012-13, the EPFO had given a rate of return of 8.5 per cent.

chart

“The trade unions are unhappy with the decision. The rate of return on government securities has been coming down and the EPFO had limited surplus to offer higher rate,” said EPFO’s CBT member A K Padmanabhan.

By agreeing to give an interest rate of 8.5 per cent, the EPFO will be left with a surplus of around Rs 700 crore, a CBT member said, requesting anonymity. The EPFO could have offered a higher interest rate of 8.55 per cent, keeping a surplus of around Rs 300 crore, but decided not to do so.

“The economic conditions are not conducive. The impact of coronavirus on the global and domestic economy is yet to be seen. Hence, the EPFO decided to keep a higher surplus thereby offering a lower rate of interest,” the official said. Increasing the interest to 8.6 per cent or at the present rate of 8.65 per cent was not an option as the EPFO would have left with a deficit in its funds. When the EPFO had notified an interest rate of 8.65 per cent — the first hike in three years — in 2018-19, it had kept a surplus of around Rs 150 crore.

The new rate of interest is higher than the return on investment in small saving schemes and that of provident fund schemes for government employees.

Labour ministry keen to retain 8.65% interest rate on EPF deposits for FY20

The labour ministry is keen to retain an interest rate of 8.65 per cent paid on provident fund deposits to around six crore subscribers of retirement fund body EPFO for the current financial year, a source said.

The apex decision making body of Employees' Provident Fund Organisation (EPFO) -- Central Board of Trustees -- is likely to consider the rate of interest on EPF (Employees' Provident Fund) deposits in its meeting scheduled on March 5, 2020.

"The proposal to provide interest rate on EPF deposits for 2019-20 may come up for consideration and approval in the Central Board of Trustees (CBT) meeting on March 5," a source said.

The source further said that the ministry is keen to retain the interest rate at 8.65 per cent, as was provided in financial year 2018-19.

Speculations are rife that the interest rate on EPF may be lowered to 8.5 per cent for the current fiscal, a tad lower than 8.65 per cent provided for 2018-19.

According to the source, the agenda for the CBT meeting has not yet been finalised and it is difficult to predict EPFO's income projections for the current fiscal, which will be the basis for fixing the interest rate.

The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes.

The labour ministry requires the finance ministry's concurrence to provide a rate of interest on EPF deposits in a fiscal year. Since the Government of India is the guarantor, finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal.

The EPFO had provided 8.65 per cent rate of interest to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16.

It had provided 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13.

Cut in the offing? EPFO may cut interest rate to 8.5% for FY20, says report

The Employees' Provident Fund Oragnisation (EPFO) might reduce its interest rate by 15 basis points to 8.5% in FY20. The issue is likely to be taken up at the central board of trustees (CBT) meeting of the EPFO on March 5, says a news report in The Economic Times.

This means that salaried employees would earn lower returns for the financial year ending March 31, 2020. EPFO was offering subscribers an interest of 8.65 per cent in 2018-19.

The Finance Investment & Audit Committee (FIAC) will take a final call just before the CBT meet on the rate of return on PF deposits, depending on the exact earnings of the retirement fund body, the report said.

The EPFO invests 85 per cent of its annual accruals in debt market and 15 per cent in equities through exchange-traded funds. At the end of March last year, the EPFO had a cumulative investment of Rs 74,324 crore in equities, fetching a return of 14.74%.

Taking steps for speedy redressal of EPFO, ESIC related: Labour Ministry

The Labour and Employment Ministry on Monday said procedures and policies are being streamlined to ensure speedy redressal of grievances related to EPFO, ESIC and other entities under it.

In 2019, there were a total of 9,02,203 complaints on the EPFi Grievance Management System (EPFiGMS) and out of them, 8,38,579 complaints were disposed of, as per official data provided to the Lok Sabha in a written reply.

Labour and Employment Minister Santosh Kumar Gangwar told the House that the ministry is progressively reviewing and streamlining policies and procedures in relation to disposal of public grievances.

The grievances include those related to Employees' Provident Fund Organisation (EPFO), Employee State Insurance Corporation (ESIC), Chief Labour Commissioner (Central).

"Besides, various systemic reforms and Information Technology (IT) initiatives with an objective to achieve speedy redressal of grievances, have been taken up," the minister said.

The number of complaints related to the ministry on the Centralised Public Grievances Redress and Monitoring System (CPGRAMS) stood at 47,567 in 2019. Out of them, 46,283 complaints were disposed of.

600,000 pensioners to gain as EPFO's commutation come into play on Jan 1

The labour ministry will enforce the retirement fund body EPFO's decision to restore pension commutation, or advance part-withdrawal, under the Employees' Pension Scheme from January 1, 2020, a move which will benefit 630,000 pensioners, a source said.

These 630,000 pensioners had opted for commutation of their pension and got a lump sum amount at the time of retirement from their pension accumulations or fund before 2009. The provision for commutation of pension was withdrawn by the EPFO in 2009.

"The labour ministry would issue a notification on January 1, 2020, to implement the Employees' Provident Fund Organisation's (EPFO) decision to restore commutation, or advance part-withdrawal, under the Employees' Pension Scheme," the source said.

Under the commutation, monthly pension used to be cut by one-third for the next 15 years and the reduced amount was given in lump sum. After the 15 years, pensioners were entitled to get the full pension.

The EPFO's apex decision making body the Central Board of Trustees headed by the labour minister, had approved the proposal to restore commutation of pension for 630,000 pensioners opted for the benefit, in its meeting held on August 21, 2019.

An EPFO panel had recommend for amendment in EPS-95 (Employees' Pension Scheme 19995) for restoration of commuted value of pension to pensioners after 15 years of drawing commutation.

There was a demand for restoration of commutation of pension. Earlier under EPS-95 members were allowed to commute one-third of their pension for 10 years, which was restored after 15 years. This facility is available to government employees.

Tamil Nadu adds more new entry level jobs despite slowdown in auto sector

Despite a slowdown in the automobile sector, which has led to production cuts in factories in and around Chennai, Tamil Nadu has added new jobs, in the 18-21 years category, and has emerged as the second largest generator of employment after Karnataka.

During the year 2018-19, Karnataka ranked first in new payroll addition with 265,827 people coming under the ambit of EPFO, as compared to 260,699 people from Tamil Nadu. Maharashtra continued to see the largest net new payroll addition in this period. Maharashtra saw a net new payroll addition of 531,060 in 2018-19 and the number stood at 2,44,166 in the April to July, 2019, period.

According to data released by the Employees' Provident Fund Organisation (EPFO) in September, 2019, net new payroll addition, in the age group of 18 to 21 years, in Tamil Nadu during July, 2019, was 44,311. During the period from April to July, the total net new payroll addition was 150,835, compared to 127,731 net payroll addition in Karnataka during the same period.

A senior official of the state government said that since Tamil Nadu was the second largest economy in the country and number one in terms of number of factories and workers, the growth in terms of new employment creation was on expected lines.

"In 2019, we have seen a slew of investments coming in. Out of the many Memoranda of Understanding (MoUs) signed during the Global Investors Meet, foundation stones of around 37 projects have been laid and work on these projects has begun. In the micro, small and medium enterprises (MSME) space, around 2,300 units have started production. A lot of investment has also come in apart from that committed under the MoUs. There has been an increase in terms of investment and growth," said the official.

Last year, Tamil Nadu's economy grew 8.4 per cent as compared to the national growth of around 6 per cent. Despite the slowdown in the automobile sector, unlike in other States, growth has been witnessed in Tamil Nadu.

One of the areas, where growth has been seen, is contract manufacturing. Electronics manufacturing is another sector which is seeing a growth and is bringing in more investments. For instance, one of the major contract electronics manufacturers added thousands of employees in Tamil Nadu in the last 18 months.

"Contract manufacturing is a big area where employment is coming. In Cheyyar SEZ, leather manufacturers are also generating more employment," he said.

Data shows that the state has moved up in terms of net new payroll additions in the age group of 22-25 too, from the fourth position to the third position with 98,592 entrees during April to July, 2019, compared to 84,766 enrollments by Gujarat during the same period. Karnataka, with 1,26,755 enrollments is in the second position while Maharashtra continues to lead with 244,162 new payroll additions during the period.

Gujarat (137,373) was in the third position after Maharashtra (486,518) and Karnataka (219,708), while Tamil Nadu registered new payroll additions of 126,990 people in 2018-19.

Over 6 crore EPFO subscribers to get 8.65% interest for 2018-19: Gangwar

Labour Minister Santosh Gangwar on Tuesday said over 6 crore EPFO accounts will be credited with interest amount at 8.65 per cent rate for 2018-19 ahead of the festival season.

The Central Board of Trustees -- the apex decision-making body of the Employees' Provident Fund Organisation (EPFO) -- had approved 8.65 per cent interest rate for the last fiscal on February 21, this year.

The proposal was sent for the concurrence of the finance ministry. Once approved by the finance ministry, the EPFO would credit the interest amount at 8.65 per cent rate in subscriber accounts and settle claims on this rate.

At present, the EPFO is settling PF withdrawal claims at 8.55 per cent interest rate, which was approved for 2017-18.

"...ahead of the festival season, over 6 crore EPFO subscribers would get 8.65 per cent interest for 2018-19," Gangwar told reporters on the sidelines of the National Safety Awards function here.

On the delay in notifying EPF interest rate, the minister said, "Finance Minister (Nirmala Sitharaman) is busy these days. She has the file (proposal for EPF interest rate for 2018-19). She does not disagree on this. The 8.65 per cent rate of interest approved by us would be provided to EPFO subscribers for 2018-19. It should be done in few days."

Talking about new infrastructure to be set through bodies under the labour ministry in the two union territories of Jammu & Kashmir and Ladhak, the minister said, "The Employees State Insurance Corporation (ESIC) would open a 30-bed hospital in Leh and 100-bed hospital in Srinagar. Besides, the EPFO would open its offices in Srinagar and Jammu, and if needed in Leh also."

After the abrogation of special status for Jammu and Kashmir, as many as 106 central laws would be implemented in the two union territories from October 31, 2019. Therefore, the central government needs to create infrastructure to enable implementation of those laws in the new union territories.

On the issue of unemployment, he said, "The number of workers increased by 2 crore in all those establishment where 20 or more workers work in last three years. Their number increased from six crore to eight crore now. We are also working for over 40 crore unorganised sector workers in the country."

About having a true picture of employment scenario in the country, he said, "We are also working on employment generation data from all those businesses where only one to two people work. They have got loans from the government. It would take one more year to firm up unemployment data.

EPFO to launch e-inspection system for companies to simplify process

EPFO will launch an e-inspection system that will simplify inspection process and ensure organisations with open communications will not be subject to physical inspection until absolutely necessary, according to Central Provident Fund Commissioner Sunil Barthwal.

EPFO (Employees' Provident Fund Organisation) proposed to amend the Act to limit enquiry period to a maximum of two years in order to curtail harassment, he also said at a Confederation of Indian Industry-organised interactive session last Friday, a CII release said.

A small percentage of employees are unable to generate UAN (a 12-digit Universal Account Number to all employees entitled to EPF) due to mismatch in data, Barthwal said, adding to address this issue, the EPFO is looking at alternative authentication vis-a-vis the employee database.

"The EPFO is working towards a three-day settlement period for KYC (Know Your Customer) compliant beneficiaries who have UAN linked to Aadhaar, have a bank account and a registered mobile number," the release quoted him as saying.

Barthwal also proposed to set up a society of self-regulating consultants, similar to ICAI (The Institute of Chartered Accountants of India), in order to curb "misuse and corruption."

"In a significant announcement for industry he proposed to decriminalise defaulters and treat the cases as economic offences," the release said.

The release quoted EPFO officers as saying that the process of claim has evolved from offline filing to digital and app-based platform and the next phase of advancement will be based on big data analytical platform that utilises artificial intelligence and machine learning to trigger all activities.

India generated record number of jobs in January 2019, shows EPFO data

If payroll data is to be taken as the true barometer of job creation in the formal sector, January 2019 saw the highest number of jobs being generated since the data from September 2017. However, while the government relies heavily on payroll data, released by the Employment Provident Fund Organisation (EPFO) for gauging jobs in the formal sector, critics don't find the data robust as the bump is seen in the data because of the requirement that any establishment employing at least 20 people has to cut provident fund. So, if an entity is employing 19 workers in one month and 20 workers in the next, all 20 will be counted in the headcount against zero in the previous month. Besides, the data is revised downward for most months after the provisional number is released. The figure for January, 2019 is the provisional figure.