The smoother and easier way of transferring EPF money
MUMBAI: The process of transfer of Employees Provident Fund money is not smooth and according to VP Joy, central provident fund commissioner, Employees Provident Fund Organisation (EPFO), the delay is primarily due to the multiple bank accounts held by regional provident offices. “The transfer can take months because the money in the employees account has to be transferred from the bank account held by a regional provident fund commissioner’s (RPFC’s) office of the previous employer to the bank account held by the RPFC of the new employer,” he said.
To reduce the turnaround time of such transfers, EPFO has decided to discontinue the practice of multiple bank accounts and keep just one. This is likely to get operational by the end of this week. “We have now abolished individual State Bank of India (SBI) receipt accounts and have only one bank account for the EPFO. The money is tagged to the employee’s UAN and as she changes jobs, only the account details get transferred to the new EPF office. There is no physical movement of EPF money,” he explained.
Under the one-bank-account system, transfer of money is no longer needed. EPFO simply tags the new provident account to your UAN and the contributions continue to happen. Of course, the process of transfer still remains the same: you fill up Form 13 which the current employer sends to the previous employer for verification. But in a month’s time even that is expected to get better.
EPFO plans to do away with form-filling exercise that is needed to initiate a transfer. “This facility will be applicable for those employees whose UAN (Universal Account Number) is seeded with Aadhaar. Through this we should be able to cut the transfer time to about five days,” added Joy. “The employer will just take your UAN and register you as an employee digitally with the EPFO. The RPFC of the previous employer will update the account history tagged to this UAN and the transfer is complete. Since KYC (Know your customer) can be processed through the UAN, we have eliminated the verification process by the former employer and also the formfilling exercise completely.”
The facility of auto transfer has been a long-awaited step. “Even as UAN was launched, the process of transfer was never automatic although it should have been—since UAN allows for seamless account portability. Now, EPFO has centralised the database so information can move in real time between the RPFs, which in turn will help in the autotransfer,” said Madhu Damodaran, head, legal operations, Simpliance, a labour law compliance software firm.
The path that EPFO is walking on is to de-link the employee’s PF account from the employer completely and eliminate the role of the employer in the transfer process. However, Amit Gopal senior vice-president, India Life Capital Pvt Ltd, said, the EPFO needs to get an effective system for data correction.