What is EPFO?
Employees’ Provident Fund Organisation (EPFO) was established by an act of Parliament of India, to provide social security to workers working in India. It came into force by Employee Provident Fund and Miscellaneous Provision Act, 1952. EPFO comes under the control of the Ministry of Labour and Employment, Government of India.
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There are 3 major schemes of EPFO
1. EPFO Scheme 1952
Salient features of EPFO schemes
- Accumulation plus interest upon retirement and death
- Partial withdrawals allowed for education, marriage, illness and house construction
- Housing scheme for EPFO members to achieve the Prime Minister’s vision of Housing for all by 2022.
2. Pension Scheme 1995 (EPS)
Salient features of the Pension Scheme
- The monthly benefit for superannuation/benefit, disability, survivor, widow(er) and children
- Minimum pension of disablement
- Past service benefit to participants of the erstwhile Family Pension Scheme, 1971.
3. Insurance Scheme 1976 (EDLI)
Salient features of the scheme
- The benefit provided in case of death of an employee who was a member of the scheme at the time of death.
- Benefit amount 20 times the wages, maximum benefit of 6 Lakh.
EPFO is the largest social security organization in the world in terms of the number of covered beneficiaries and the largest in terms of the volume of financial transactions undertaken. On 1st October 2014, Prime Minister launched Universal Account Number for Employees covered by EPFO to enable PF number portability.
- The organization is divided into zones which are headed by an Additional Central Provident Fund Commissioner.
- At present, there are 10 Zones across the country.
- States have one or more than one regional offices headed by Regional Provident Fund Commissioners (Grade I)
- Regions are subdivided into Sub-Regions headed by Regional Provident Fund Commissioners (Grade II)
- Districts have a district office
- Currently, there are approximately 4.5 crores, active members, under EPFO
- There are approximately 65 Lakh Pensioners
Recently Steps were taken by the EPFO to facilitate efficient services
Online facilities provided by the EPFO for the following processes
- Ascertaining balances
- Settling claims
- File online cases by members
UAN (Universal Account Number)
It is a 12 digit number allotted to an employee working in an organization. If a person has multiple member ID’s issued by multiple organizations, all the ID’s will come under one single UAN number which will be the same for a lifetime. This number will not change even when an employee changes his organization.
The various benefits are attained due to UAN.
- Reduces confusion of multiple ID’s and will have one single UAN number
- Easy transfer and withdrawal of claims
- Online-pass book
- SMS services
- Online KYC update
- Download UAN EPF book
- Check EPF balance online
Number of new enrolments
- During 2018-19, approximately 61 Lakh new subscribers joined the social security schemes run by EPFO.
- During September 2017 – September 2019, around 2.85 crore new subscribers joined the EPF scheme.
Social Security Code Bill 2019
The Bill will be tabled in the Parliament in the 2nd week of December 2019. This Bill is being proposed by the Ministry of Labour, to reduce the Employee’s contribution to PF. Provident Fund has 2 components. One is the Employees part and the second is the employers part. Currently, the Employee contribution and Employers Contribution to PF stands at 12% of the Basic Salary. As per the proposed Bill, which will be tabled in the Parliament; Employees will be given the option of reducing their contribution to PF. This is being done to increase the take-home salary of Millions of employees in the Organised sector to boost the consumption and therefore arrest the decline in the economy.
Salient Features of the Social Security Code Bill 2019
- Reduce Employee’ contribution to PF.
- Employers contribution to PF to remain at 12%
- Fixed-term contract workers will be eligible for gratuity on a pro-rata basis, currently, workers are not entitled to gratuity before completing 5 years of continuous service as prescribed in the Payment of Gratuity Act, 1972.
- Proposes to set up Social Security Fund under using a corpus under Corporate Social Responsibility. This fund will provide benefits such as a pension, medical cover, death, and disablement benefits to all workers, including gig workers.
- Firms with 10 or more employees will have to provide health, pension, and other benefits.
- Flexibility for procuring compulsory insurance from IRDA
- To better Ease of Doing Business, there will be Single Registration and Single return for employers.
- EPFO and ESIC to continue as autonomous bodies
Social Security Code Bill 2019 subsumes 8 Central Labour Laws
- Employees Compensation Act, 1923
- Employees State Insurance Act, 1948
- Employees Provident Funds and Miscellaneous Act, 1952
- Maternity Benefit Act, 1961
- Payment of Gratuity Act, 1972.
- Cine Workers Welfare Fund Act, 1981
- Building and other Workers Cess Act, 1996
- Unorganized Workers’ Social Security Act, 2008.
The above details would be of help to candidates preparing for the UPSC 2020 exams from the perspective of the mains examination.