The prime minister of India, Shri Narender Modi at a function organized by the Ministry of Labor and Employment initiated 5 different programs. The main aim of initiating these programs was to ensure” minimum government and maximum governance” and to bring more transparency and speed in the governance. One amongst such scheme was the Universal Account Number (UAN). It aimed at making the Provident Fund Account portable, hassle free and easily accessible to 4.17 crore employees in the country.Under the scheme, approximately 4 core employee under EPF.
Scheme was compiled and digitized and provided a Universal Account Number to all.The UAN will be linked with a person Aadhaar number and bank account. Further, the Prime minister also stated that this universal number will also consist of the KYC details of all the employees and will also ensure the inclusion of the weaker section of the society.
With the introduction of the UAN, EPF accounts will get updated monthly and an SMS about the same will be sent the holder. There will be easy portability through UAN.
UAN refers to Universal Account Number is a 12-digit number comprising of all PF account across different organization centralized into one. The card comprises of employee’s photo and KYC and thus it also helps companies to know their employees.
Features of UAN
- UAN will ensure the centralization of employee data and decrease the dependency of employers on EPF.
- The UAN acts as an umbrella for a multiple member ids.This means that even if a person has a number of PF account he or she can link all the account under one UAN.
- It will help in easy transfer and withdrawal of claims
- The UAN portal can also be used to check EPF claim, EPF passbook, and other facilities.
- The employer will no longer require to hold back the employee’s number.
- employees can also check their employer’s contribution by checking their EPF account every month.
- Each employee will be issued with one UAN number
- Any change in job will not lead to change in UAN
- UAN employee registration is done through employee’s organization
- The linking of different account under UAN can be done in EPFO portal
Advantages for the Employees
1)Less employee intervention: With UAN any request for PF withdrawal does not require the approval of the previous employer. The PF account of your old organization will be automatically linked to the PF account of your new organization and money will automatically transfer from the old to the new account
2)Easy transfer of funds: UAN ensures that change in an organization does not lead to a transfer of money from the employer account to another account. All you need to do is give your KYC and UAN details to your new employer. Once these details are verified your old account will be linked to your new account.
3)PF Passbook: By mentioning the UAN in the PF passbook, you can also check your balance, an SMS will be sent every time when money is transferred or credited to the account.
4)Efficient pension Scheme: Since money is easily transferred from one account to another, employees do not need to withdraw their Pf money. This will ensure greater pension money after retirement.
How to Link Account Using UAN?
Earlier it was difficult to maintain multiple accounts at the same time. However, with the introduction of the system of UAN, employees do not have to worry about the transfer of the amount from one account to another.
Accounts can be linked by following the procedure below:
- To verify the transfer claim, employers must have the digital certificates of the employees.
- Your EPFO database must comprise of your both previous and your present PF account numbers and member ID.
- Register in the EPFO online portal.
- Now, Log on to the OTCP website, select the document type and the fill in your document details.
- Go to menu bar, select request for claim under claim and fill in the necessary details
Part A: Name, Bank account number, Email id, IFSC code of the bank.
Part B: Details of your PF account of your previous establishment, name, and address of the establishment. If your details are already in the EPFO database, it will automatically get filled up but if the details are not available then you will have to fill it up manually.
Part C: Here you will have to fill in the details of your current employer which will again be crosschecked against the EPFO database records.
- Select the employer (present and previous), who will attest your claim
- By clicking on preview, you can view your application and you can change the data if you want to.
- Download the transfer claim form.
- Next, you need to take the print out of form 13 and present it to the employer to complete the claim submission.
You will also be able to check the status of transfer through member portal account.
How to Activate UAN?
After getting the UAN number an employee must activate it by visiting the EPCO online portal.The following steps must be followed to activate the UAN number:-
- Visit the EPFO website and click on the “Activate your UAN” link
- Fill in your UAN number, mobile number, and Member ID in the UAN activation page
- Click on the“Get Pin” option. After this, you will receive an activation PIN on the registered mobile number.
- Fill the PIN number and click submit.
- Next, write your UAN login password to complete the process.
Linking UAN and Aadhaar
The Labour ministry has made it compulsory to link Aadhaar with UAN. This is because the Aadhaar comprises of address and identity details but also the biometric details of an individual.This makes the verification process easier and quicker. Further employees can update their KYC details in future using their Aadhaar details by simply logging in to their UAN account. Aadhaar can be linked with UAN with 4 easy steps:-
- Log in to UAN member portal. For successful login, a person will first have to activate the UAN.
- If already a member, enter your UAN number, password, and the captcha to sign in.
- Click on “Manage” on the UAN dashboard and then select “KYC”.
- After this, you will be redirected to a page where a form will appear on the screen to update KYC document.Enter the number and name of the documents in the appropriate columns provided.In the case of bank account you will also have to submit your IFSC code and in the case of passport or driving license, the expiry date will have to be mentioned.
Further, there are a number of benefits of linking Aadhaar with UAN. For instance
- Now, PF claims can be withdrawn within 5 days if applied online using Aadhaar number.This is mainly done to encourage Aadhaar seeding.
- Now, there will be less employee intervention as the claims will be available in field office application software without routing the same through the employer.
- The online claim forms will be available for only those people who have seeded their Aadhaar number and bank details with the UAN.
As not everyone is well – versed with internet and has a secured internet connection, EPFO (Employees Provident Fund Organization) have made submitting life certificate easier.
EPFO have laid down provisions that will help pensioners to submit their life certificate smoothly as they can submit their Jeevan Pramaan Certificate in physical form. However, this facility will be provided to people who have recorded genuine reasons for non – submission of digital Jeevan Pramaan.
Also, in case a pensioner has already submitted their Jeevan Pramaan Certificate digitally, they are not required to do so again. And they would have the option of submitting the digital or paper based certificate to pension drawing bank branches.
As per the new conditions of EPFO, pensioners who have not submitted Jeevan Pramaan digitally even once can do so within this month in physical form.
To submit Jeevan Pramaan, one can visit EPFO offices, pension disbursing banks and common service centres.
Jeevan Pramaan is a biometric enabled digital service for pensioners of Central government, State government, or any other Government organizations. Pensioners have to register themselves and then they can continue to generate Jeevan Pramaan by using the Biometric authentication. Jeevan Pramaan life certificate can produced digitally from the comfort of your home as it can be done online. However, the traditional life certificates can be produced only by the authorized Pension Disbursing Agencies (PDAs) / Pension Sanctioning Authorities (PSAs) like Banks, Post offices etc.
In India more than one crore families can be classified as pensioner’s families. And one of the major requisite for the pensioners is to provide life certificates to the authorized pension disbursing agencies like Banks, Post offices etc., following which their pension is credited to their account. It requires the pensioner to be physically present in front of the disbursing agency or getting a life certificate often becomes a major hurdle in the process of receiving the pension. Being physically present causes a lot of inconvenience to the pensioners because of their age and also people often choose to move to a different location for various reasons. Hence, digital life certificate for pensioners which is also known as Jeevan Pramaan address this problem by digitizing the whole process.
At present, nearly 48.48 Lakh pensioners have registered for Jeevan Pramaan. And after 1st November 2016, nearly 31.24 Lakh pensioners have registered under Jeevan Pramaan life certificate.
This online enrollment and biometric authentication system will simplify the way pension payouts have been functioning in India. And as a part of Digital India initiative, the Jeevan Praman Scheme aims at sparing the pensioner from the trouble of visiting a PDA or PSA for the submission of life certificate.
According to the sources EPFO is introducing a new scheme of automatic transfer within 3 days. After the implementation of this scheme an employee will no longer have to transfer their Employee Provident Fund Account.
The Employees’ Provident Fund Organization (EPFO) is pondering over the option of introducing automatic EPF transfer if he / she change their job.
Contribution to the EPF Account – In EPF account, every salaried person contributes a certain portion from their salary to their EPF account along with the same amount of contribution by their employer. The contribution then compounds at a rate declared by the EPFO every year. At present, the rate of interest is 8.65% per annum.
Features of New EPFO Scheme i.e. Automatic Transfer Scheme
- Easy Hassle – Free process
The new automatic transfer scheme is going to be very convenient for the employees as the account will be transferred automatically which does not even required an application.
- Linking PF Account with Aadhaar
As Government of India has mandated the 12 digit Aadhaar card to be linked with almost every other document, this linkage can save your PF account from duplicity. Also, in order to register with the unique identity number, the transfer of an employee’s account is simpler.
Though Government have declared in Aadhaar Privacy Case that “privacy is a fundamental right”, it is yet to see if it effects on linking Aadhaar with PF.
To know more about the Aadhaar Privacy Case read: Verdict of Aadhaar and Right to Privacy Case https://rupeenomics.com/verdict-aadhaar-right-privacy-case/
- Tracing Old Accounts
As there were lot of errors at the administration level, the employees mostly choose to withdraw their PF account.
It was also made it clear by the Employees Provident Fund Organization that an employee can withdraw their PF account only if they are unemployed for three – months or if they are retiring.
However, the authorities have introduced Universal account Number (UAN) which will find a way for the unclaimed PF accounts as the process is being worked upon to be less tedious.
UAN was introduced by the EPFO for a quick and hassle free transfer of PF accounts. With the introduction of the Universal Account Number an employee can simply transfer their PF account from one organization to another by providing the UAN number to the new employer.
To read on UAN activation you can also read: How to activate your UAN
Under EPF (Employees Provident Fund), it is advisable to transfer PF accounts between organizations as and when employees change their jobs.
Earlier subscribers had to file separate EPF transfer claims which is Form 13 (For transferring PF / pension between different accounts) regarding the same.
However, EPFO (Employees Provident Fund Organization) has declared that the subscribers no longer have to file separate EPF transfer claims using Form -13 as it will now be done automatically.
Although, at the time of joining, the employees are required to provide details of the previous EPF account in new composite F-11 form (which is a declaration form by a person taking up employment in any establishment on which EPF scheme is applicable). And after that funds will be automatically transferred by the EPFO to new EPF account.
An official of EPFO also said that they are deciding upon providing Aadhaar card and bank accounts of the employees along with to use new F – 11 composite form.
Also, note that recently EPFO (Employees Provident Fund Organization) have mandated linking Aadhaar number with the EPF account after Government made Aadhaar mandatory for all the other official documents. This linkage will also help to avail subsidized scheme easily where the subsidized amount will be transferred directly into the account.
To know more about the linkage between Aadhaar card and EPF account read
So, the Composite declaration form (F – 11) is replacing form 13 (For transferring PF/pension between different accounts) which is decided by the EPFO.
EPFO (Employees Provident Fund Organization) which works under the Ministry of Labor and Employment has also introduced an online portal where a subscriber can check EPF claim status online as well. And this process is easy and hasslefree. And only an EPF member or subscriber can make a withdrawal claim.
According to a report by the Economic Times, EPFO will soon start paying part of the retirement fund to pensioners in the form of MF Units . At present during the time of exit, a pensioner gets a consolidated fund along with an interest rate decided by the EPFO’s Central Board of Trustees. The current Interest Rate on PF account is 8.65%
What does it means?
According to the new policy which is under discussion, the pensioner will be paid 85 % of the total amount with the interest rate decided by the EPFO. Return on the rest of the 15 % of the total amount will be decided on the basis Mutual Fund model. The interest rate on this particular 15 % will be paid by multiplying the units accumulated with the value of equity on the day of exit. Subscribers may defer encashment by 1 or 2 years depending on future returns and the tenure finalised by CBT.
Benefits of the new methods of Payments
EPFO started investing in equities since 2015 with only 5 % of the corpus. Since then it has been increasing its investment. The total investment by pensioners in the financial year of 2016 was Rs 6577 crores which increased to Rs 14982 crore in the financial year of 2017. Some of the predictable benefits, if the above-proposed decision is adopted are:
- As stated above the return on 15% of the retirement corpus will be higher than the regular EPF Interest Rate. Looking at current market conditions the rate of return on equity is around 15%, which is higher than EPF Interest rate of 8.65%
- It will give many investment options and help in creating new structures that will help in lifting the allocations of investment on equities.
- This will also mean that pensioners can delay their encashment at the time of exit. The subscribers can defer their withdrawals by up to 2 years, if they deem that it will ensure them higher returns.
While the proposed policy has many benefits, the opposition has already arisen from trade unions and labor unions. According to them, this policy will not be beneficial as the rate of interest based on the MF model is not fixed and may yield less return or no return at all.
To know how to check your EPF Balance please visit Ways to Check your EPF Balance