What Is EPFO?
Updated On Aug 08, 2022
Table of Contents
EPFO is recognized as one of largest global social security organisations in terms of customer and financial activities. The Employees' Provident Fund was established with the enactment of the Employees' Provident Funds Ordinance. It was repealed in 1952 by that of the Employees' Provident Funds Act. The Employees' Provident Funds proposed legislation in Parliament as Bill Number 15 in 1952, with the purpose of establishing defined contribution plans for employees in industries and other businesses.
The act and the schemes enacted under it are governed by a tripartite body known as the Central Board of Trustees, Employees' Provident Fund, which is composed of members from the Government (both Central and State), Employers, and Employees. They manage a cooperative provident fund, a pension system, and an insurance programme for workers in India's organised industry. To know more about EPFO, read on.
Application Of Employee Pension Fund (EPF)
Under the 'Directive Principles of State Policy,' the Indian Constitution states that the state must make effective provisions to protect the rights to work, education, and government aid in contexts of unemployment, old age, illness and incapacitation, and unmerited need within the boundaries of its economy.
According to this declaration, a flexible social security programme was required in the evolving landscape. As a result, legislation establishing a provident fund was established in an effort to ensure a decent living for employees and their families when their job tenure ended.
Functioning Of Employees' Provident Funds Ordinance (EPFO)
EPFO also serves as the focal point for the implementation of Bilateral Social Security Agreements with some other nations. Furthermore, it is one of India's biggest social safety organisations of both subscriber base and financing decisions. The Central Board of Trustees is the EPFO's highest decision-making body. EPFO has taken a number of steps to streamline the management of EPF accounts for both employers and workers by implementing IT-enabled tools and approaches. EPFO has recently launched a variety of strategic initiatives.
Overall, the EPFO has two functions: administration and oversight of the Act's execution, as well as service provision to protected recipients, i.e. members. The EPFO website offers data and digital services.
Universal Account Number (UAN)
EPFO established UAN, which serves as a catch-all for several member IDs assigned to one individual by various businesses. The UAN programme was introduced in October 2014. It is possibly EPFO's most spectacular step in recent memory.
EPFO assigns a specific 12-digit number to each employee. Numerous EPF accounts (individual IDs) assigned to a single person can be linked via UAN. Employees must activate their UAN via the UAN web portal in order to use EPFO's extensive digital services.
The UAN portal provides a variety of services, along with a regularly updated UAN card, a revised EPF passbook (along with all transfer specifics), the ability to link preceding beneficiary IDs with the current ID, SMS notifications concerning the credit of contributions in the PF account, as well as the ability to auto-trigger transfer requests on change of jobs.
Employees can enrol their UAN in the UAN Member e-Sewa website and approve it to have accessibility to the site's services. Obtaining a UAN card, renewing KYC information on the web, obtaining an EPF account passbook connected to a UAN, submitting a formal offer, and much more services are accessible.
Endnotes
To summarise, the Indian government established the EPF as a post-retirement programme to encourage savings among salaried people and assist them in accumulating a sizable retirement corpus. Loans can be obtained against the balance of an EPF, which is tax-free. It offers pension benefits as well as financial protection for insurance and calamities.
Also read: What Are Government-aided Pension Schemes?
