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As a new year beckons, retirement fund body EPFO (Employees' Provident Fund Organisation) is set for a major overhaul in the way it manages the provident fund deposits of its over five crore subscribers.
While it went through an image makeover and took many steps to improve the quality of services it offers during circa 2014, the EPFO has lined up a number of initiatives for implementation during 2015.
EPFO could not do much about expanding its investment options to maximise the returns for providing higher interest rate to its subscribers during 2014, and fresh attempts can be made in the new year in this regard.
The proposal to invest in the equity was shelved in its trustees meet held in August as well as in December. The trustees are still not in favour of the proposal to invest in equities and Exchange Traded Funds (ETFs).
However, the trustees have recommended making the investment pattern more flexible to further increase the percentage of investment in government securities.
EPFO's much awaited portable PF account number or Universal Account Number (UAN), which was launched by Prime Minister Narendra Modi on October 16, is scheduled to become operational in the new year and is expected to bring a complete paradigm shift to the way it identifies its over five crore subscribers, who are mainly organised sector workers.
The body has been trying to improve its delivery of service through core banking type service for its subscribers and the UAN would eventually enable the EPFO to provide that kind of service to its subscribers.
However, it can prove to be a challenging task to make operational the UAN for crores of subscribers, who would first need to operationalise this identity number online and that can be tricky with a large proportion of the account holders living in interiors of the country not being tech-savvy.
The UAN will give the facility of collation of accounts, viewing of updated accounts as well as downloading the same and putting all services on one platform.
The UAN would be portable throughout the working career of members and can be used anywhere in India. Thus, workers in organised sector would not need to apply for transfer of PF account claim on changing jobs.
During 2014, the EPFO also announced an increase in the minimum wage ceiling to Rs 15,000 per month, from Rs 6,500 per month. The decision to enhance this minimum wage ceiling, for becoming a subscriber of EPFO at time of joining employment, is expected to bring 50 lakh additional formal sector workers under the ambit of this body.
As consequence of hike in the wage ceiling, the amount of maximum sum assured under its Employees' Deposit Linked Insurance Scheme has also been increased to Rs 3.6 lakh.
EPFO has also made Rs 1000 minimum monthly pension a reality which would benefit over 32 lakh pensioners, who were earlier getting lesser amounts. This scheme was earlier valid till March 31, 2015, but the EPFO has now decided to extend its entitlement beyond the current fiscal.
