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Friday, September 14, 2012

Permanent Provident Fund Account No. by 2013

Relax salaried Employees ! Permanent provident Fund Account No. by 2013 

Come March 2013, salaried employees will be able to switch jobs, without worrying about withdrawing or transferring their savings with the Employees Provident Fund Organisation (EPFO). As the EPFO migrates from a decentralised to a centralised system, it intends to give permanent account numbers to their holders.

Currently, salaried employees need to open new EPF accounts whenever they change jobs. The old PF numbers are either closed, or the money in it withdrawn or transferred into new accounts. It turns more complicated when the employee moves from one state to another for a job. To put an end to this difficulty, the EPFO intends to shift to a permanent account number, akin to a mobile number, to make this possible.

Speaking to Business Standard, EPFO, Central Provident Fund Commissioner, R C Mishra, said,-

" At present our offices are decentralised. So, the employee has to often open a new PF account whenever he changes job and has to transfer his savings. We are making our operations centralised. In the proposed method, the employee will be given a single permanent number valid irrespective of the employer or city he moves to. He doesn’t need to open a new PF number every time he switches his job." 

Mishra added that a permanent account number would not only be of great help to employees but it would also reduce unnecessary burden on the EPFO, resulting in huge savings.

EPFO has set a deadline of March 2013 to make its operations centralised. Mishra added, 

"We are hopeful that all required infrastructure would be in place by the end of this fiscal. We are working on the modalities and very soon appoint a consultant to initiate the process. Once a consultant is appointed, the EPFO will follow its advice for business process re-engineering to redesign the workflow within the organisation. Besides that it would also assist us in floating tenders for appointment of vendors to undertake the project."

EPFO has about 110 million member. Of this, an estimated three crore are active members. In many cases an employee has multiple accounts and also a good portion of accounts are lying idle as subscribers have not transferred their funds to their new accounts.

Currently, the organisation manages a corpus of at least Rs 4.10 lakh crore. A senior official said that once the new system is implemented, it will lead to a decline in the number of claims settlement procedures also. Officials also agreed that with the implementation of permanent account number, the cases of premature withdrawal will reduce drastically.

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