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Govt Mulling Hiking EPFO Salary Cap To From Rs…

20 September 2024
by admin

New Delhi: Union Labor Minister Mansukh Mandaviya has said the government is considering increasing the monthly contribution cap for subscribers to the Employees’ Provident Fund Organization (EPFO) and the Employees’ Pension Scheme (EPS).

The government intends to increase the salary cap of Rs 15,000 for employee contributions, according to the Union minister. The Minister said, “We are trying to increase this limit of Rs 15,000.” Mandaviya said discussions about raising the minimum pension under the EPS were ongoing inside the Ministry. The minister said this during the first 100 days of the Modi 3.0 government.

Currently, the pension contribution is set at 8.33% of the maximum wage ceiling, and contributions are payable on the Rs 15,000 maximum wage ceiling.

Under the Employees’ Provident Funds and Miscellaneous Provisions Act of 1952, companies with 20 or more employees must make provident-fund savings. A minimum of 12% of an employee’s pay is automatically deducted to fund provident funds, with an additional 12% contributed by the employer.

Employees who earn more than Rs 15,000 can choose the percentage of their salary to set aside for pensions and retirement benefits, Mandaviya said in an earlier press briefing.

What will be the impact on EPS and EPF once the EPFO wage ceiling is revised?

The government is considering increasing the EPFO salary cap from Rs 15,000 to Rs 21,000. Contributions made by employees to their EPS and EPF will be affected once the EPFO wage ceiling is revised.

In the case of employees making Rs 15,000 or less per month, the employer and employee each contribute 12% of their monthly earnings to the EPF account under the EPFO. Currently, the maximum wage ceiling of Rs 15,000 applies to both employer and employee contributions.

EPFO rules dictate that employee contributions are based on basic salary with the employee’s whole contribution going into the provident fund account. The employer’s contribution is divided into EPS (8.33%) and provident fund account (3.67%).

The current EPF contribution for an employee with a basic salary of Rs 15,000 is Rs 1,800, but if the wage ceiling is revised to Rs 21,000, the contribution will increase to Rs 2,520.

When the employer matches the employee’s 12% contribution, it gets bifurcated to 3.67% EPF. The current monthly payment by the employer which is Rs 550.50 will increase to Rs 770.70 post the proposed EPFO wage ceiling revision.

How will wage ceiling revision increase the retirement corpus from EPFO?

Assume that a worker, at the age of 23, enrolls in the EPFO plan, with a basic pay of Rs. 15,000, and continues to contribute for the next 35 years, until he retires at age 58. Throughout his employment, the employee amasses a total corpus of Rs 71.55 lakh, generating an interest sum of Rs 60.84 lakh on his own contribution of Rs 10.71 lakh at an annual interest rate of 8.25%.

Increased wages to Rs 21,000 would result in a corpus of Rs 1 crore over 35 years, with interest of Rs 85 lakh on the Rs 15 lakh personal investment.

As a result, the employee will receive Rs. 28.45 lakh in extra EPF corpus upon retirement, besides getting a higher pension under EPS.

Revision of wage cap to increase the amount of pension

A larger pension amount will be received by EPF subscribers upon retirement since the EPS contribution is adjusted in tandem with increases to the pay ceiling under the EPFO. The following formula is used to determine the EPS pension according to the Employees’ Pension (Amendment) Scheme, 2014:

(Number of years of pensionable service X Average monthly salary for 60 months)/70.

The time frame within which an employee made active contributions to their EPF and EPS accounts is known as their pensionable service period.

EPFO hikes withdrawal limit to Rs 1 lakh from Rs 50,000

Additionally, the Employees’ Provident Fund Organisation has raised the withdrawal cap from the existing Rs 50,000 to Rs 1 lakh.

“If you are an EPFO contributor and if there is some family emergency and if you want to withdraw the PF, the one time withdrawal limit has now been raised,” Mandaviya said at a press briefing earlier this month.

Provident funds provide retirement income to over 10 million organized sector employees in India, often serving as a key lifetime savings corpus. The Employees’ Provident Fund Organisation (EPFO), a statutory body under the Ministry of Labour and Employment, manages these schemes.

Science & Environment

Pension Can Soon Be Withdrawn from Any Bank Branch,…

4 September 2024
by admin

Last Updated: September 04, 2024, 20:16 IST

The Labour Ministry approved the introduction of a Centralised Pension Payment System (CPPS) for the Employees’ Pension Scheme (EPS) 1995.

The CPPS approval marks a major milestone in enhancing the efficiency of the Employees Provident Fund Organisation.

In a significant development for pensioners across the country, a new facility will soon allow them to withdraw their pension from any bank branch. Minister of Labour and Employment Mansukh Mandaviya announced on Wednesday that from January 2025, pensioners enrolled in the Employees’ Provident Fund Organisation (EPFO) pension scheme will be able to access their funds from any bank or branch nationwide.

Currently, pensioners must visit the specific bank or branch where their account is held, creating difficulties if they relocate. The new system aims to address these issues by enabling withdrawals from any participating bank branch.

The Labour Ministry revealed that Mandaviya, who also chairs the Central Board of Trustees (CBT), has approved the introduction of a Centralised Pension Payment System (CPPS) for the Employees’ Pension Scheme (EPS) 1995. This new system will facilitate pension payments through any bank branch in the country.

Mandaviya described the approval of CPPS as a significant step towards modernising the EPFO. The CPPS approval marks a major milestone in enhancing the efficiency of the Employees Provident Fund Organisation. This system will resolve longstanding issues faced by pensioners and ensure a smooth and efficient pension distribution process, he stated.

78 Lakh People to Benefit

Mandaviya stated that this development is a significant step towards transforming the EPFO into a more robust, responsive, and technology-driven organisation, better equipped to meet the needs of its members and pensioners. Over 78 lakh EPS-95 pensioners of EPFO are expected to benefit from the new centralised pension payment system. This system will ensure a seamless pension disbursement process across the country, eliminating the need to transfer Pension Payment Orders (PPOs) between offices.

This will be a significant relief for pensioners who relocate to their hometowns after retirement. The new facility, part of EPFO’s ongoing IT modernisation project Centralised IT Equipped System (CITES 2.01), will be launched on 1 January 2025. In the subsequent phase, CPPS will transition smoothly to the Aadhaar-based Payment System (ABPS).

According to the ministry’s statement, the new system represents a major overhaul of the current pension disbursement process. Under the existing system, each EPFO regional office had to establish separate agreements with just three or four banks. The statement noted that with the new system, pensioners will no longer need to visit the bank branch for verification when their pension begins, and payments will be credited immediately upon release.

Science & Environment

EPFO Officials Meet EPS-95 NAC Members To Discuss Higher…

27 August 2024
by admin

New Delhi: A delegation of pensioners’ body EPS-95 National Agitation Committee on Tuesday met with senior officials of the Employees’ Provident Fund Organisation to press for their long-standing demand for a minimum monthly pension of Rs 7,500.

The members also demanded full medical coverage for EPS members and their spouses, the EPS-95 National Agitation Committee (NAC) said in a statement.

“An invitation came to us from the Employees’ Provident Fund Organisation (EPFO) for a meeting. The objective of the meeting was to resolve the pending demands of the pensioners,” EPS-95 NAC President Ashok Raut said.

The EPS-95 NAC members have been protesting to press for their demand of Rs 7,500 as a monthly pension instead of an average monthly pension of only Rs 1,450 at present, he said.

Raut said the pensioners have been demanding an increase in the minimum pension for the past eight years, but the government has not addressed their demands.

Earlier this month, Union Minister for Labour and Employment Mansukh Mandaviya met with EPS-95 NAC representatives and assured them that the government would take necessary steps to address their demand.

The EPS-95 NAC, which includes around 78 lakh retired pensioners and 7.5 crore working employees of industrial sectors, is headquartered in Maharashtra.

Science & Environment

Good news for EPFO subscribers! New end-to-end auto processing…

22 August 2024
by admin

Provident Fund claim settlement to get easier? The Employees’ Provident Fund Organisation (EPFO) is set to launch its upgraded IT system, EPFO IT System 2.01, within the next quarter, according to multiple sources who spoke to ET. The new system is expected to significantly improve the user experience for more than 60 million EPFO subscribers and simplify compliance procedures for employers.
The revamp will include a streamlined and centralized system for payments and claims settlement.
Sources revealed that Mansukh Mandaviya, the Labour and Employment Minister, conducted a review of the IT system modernisation initiatives on Wednesday. Following the review, he announced that the new system would be operational within three months.
One of the sources was quoted as saying, “Over the next few months, implementation of the EPFO 2.01 project will ease the processes and turnaround time for various member and employer transactions.”
The implementation of these changes will lead to a streamlined and centralized claim settlement process. This includes the complete automation of claims processing from start to finish. Additionally, pension disbursements will be centralized and conducted on a monthly basis.
The EPF accounting system will be based on Universal Account Numbers, simplifying the process for members. The electronic challan-cum-receipt will be restructured and accompanied by a due statement and remittance challan. Furthermore, the requirement of transferring Member IDs (MIDs) when changing jobs will be eliminated, making the transition between employers smoother for employees.
For the fiscal year 2024-25, EPFO has already introduced simplified IT processes, including the auto-mode processing of all types of EPF advance claims up to Rs 1 lakh.

Science & Environment

Confused With PF Withdrawal? EPFO Comes With New Initiative…

20 July 2024
by admin

New Delhi: The Employees’ Provident Fund Organisation (EPFO) has around seven crore active subscribers and it’s setting up a 24/7 multilingual contact center for them. This center will be available every day of the year and provide a single point of contact for registering complaints and seeking help with any issues. This initiative aims to make it easier for subscribers to get the support they need, whenever they need it.

This decision follows recent backlash on social media about delays in resolving complaints and an increase in rejected settlement claims, as reported by The Indian Express. (Also Read: Microsoft Outage: IndiGo Issues Handwritten Boarding Passes, Passenger’s Post Goes Viral)

The EPFO has issued a tender to establish this 24/7 contact center which will be open every day of the year. The aim is to staff it with “quality people and create a robust system that will replace the current grievance registration portal (EPFiGMS) with a more advanced and sophisticated solution.” (Also Read: Microsoft Outage: SBI Reports Systems Unaffected And Working) Smoothly

How This Will Benefit People?

EPFO stated that their aim is to handle grievances across multiple channels, such as helpline numbers, landline phones at various offices, walk-ins, grievance registration portals, WhatsApp, social media (including Facebook, Twitter, and Instagram), physical mail, ChatBot, the UMANG app, and emails. By connecting the EPFO’s head office with its zonal and regional offices, the system will enable efficient problem-solving. Furthermore, it will proactively address stakeholders’ issues and keep them informed in real-time.

Multilingual Support in 23 Languages

The new contact center will support 23 languages, making it accessible to more people. These languages include Hindi, English, Assamese, Maithili, Kashmiri, Bodo, Dogri, Gujarati, Kannada, Konkani, Manipuri, Marathi, Bengali, Malayalam, Nepali, Odia, Punjabi, Sanskrit, Sindhi, Santhali, Tamil, Telugu, and Urdu.

EPFO plans to upgrade its Helpline into an Integrated Grievance Management System with new software for registering complaints. This system will include tools to oversee and enhance subscriber satisfaction by resolving grievances quickly. By automating processes in its offices, EPFO aims to speed up service and improve quality, making it easier to handle common requests from start to finish.

The Employees’ Provident Fund Organisation (EPFO) which was launched in March 1952 stands as one of the earliest security schemes for workers in Independent India. This crucial initiative came into effect just 830 days after the adoption of the Constitution.

Science & Environment

Boost to EPFO: 27 Establishments Surrender Exemption, Contributing Rs…

14 July 2024
by admin

New Delhi: In the past two years, 27 establishments have surrendered their exemption, adding about 30,000 employees and an amount of Rs 1688.82 crores to the Fund under the Employees’ Provident Fund Organisation (EPFO).

Due to improved services, more establishments are surrendering their exemptions granted by EPFO, asserted the Ministry of Labour and Employment in a release Sunday. These establishments prefer to let EPFO manage their employees’ Provident Fund (PF) directly. This allows them to focus on their core business activities.

With faster claim settlement, higher rates of return, strong monitoring, and ease of engagement, services provided to both establishments and members by EPFO are continuously improving. EPFO, under the Ministry of Labour and Employment, has taken multiple steps in the last year to streamline compliance procedures for establishments exempted under the EPF Act.

In an effort towards standardizing procedures, EPFO has, for the first time, published elaborate Standard Operating Procedures (SOPs) and manuals encompassing all procedures relevant to exempted establishments.

Furthermore, in a major step towards digitization, a new software and portal will be launched shortly to simplify the process of surrendering exemptions, the Ministry said. Establishments that wish to manage the PF corpus of their employees need to seek exemption under Section 17 of the EPF Act.

This allows EPFO to permit them to manage their own PF Trust without making statutory contributions. Such exempted establishments are statutorily mandated to provide benefits that are at least on par with those provided by EPFO to subscribers and comply with the notified conditions of exemption as outlined in the Act.

As of March 31, 2023, there are 1,002 exempted establishments managing a corpus of Rs 352,000 crores of 31,20,323 members. The increasingly enhanced focus of EPFO on its stakeholders, along with professionally managed funds generating steady returns for members, has promoted the trend of surrendering exemptions.

Science & Environment

EPFO Introduces New Rules For Cheque Leaf And Bank…

31 May 2024
by admin

New Delhi: The Employees Provident Fund Organization (EPFO) has announced a change in the requirements for uploading a validated bank passbook image or cheque leaf while filing certain claims online.

How does EPFO verify claims?

To verify claims EPFO uses verification methods instead of requiring a validated bank passbook or cheque leaf image. These methods include:

– Online Bank KYC Verification: The EPFO checks your bank’s or the National Payments Corporation of India’s (NPCI) KYC details directly. (Also Read: RBI Moves 100 Tonnes Of Gold From UK Vaults For First Time Since 1991)

– Employer Verification via DSC: Your employer can verify your bank account details using a Digital Signature Certificate (DSC). (Also Read: SEBI Bans THESE 5 Entities From Securities Markets For 3 Years: Check List)

– Aadhaar Number Verification: The EPFO validates your bank account’s Aadhaar number with the UIDAI (Unique Identification Authority of India).

This change will speed up the online claim settlement process and reduce the number of rejected claims due to missing images of attested bank passbooks or cheque leaves.

As stated in the EPFO circular from May 28, 2024 “With a view to facilitate the speedy settlement of claims filed online and to reduce the rejection of claims due to the reason of non-uploading of the image of cheque leaf/ attested bank passbook while filing claims online, it has been decided with the approval of the CPFC to relax the requirement of mandatory uploading of the image of cheque leaf/ attested bank passbook for certain eligible cases based on certain validations which include Online Verification of the Bank KYC by concerned Bank/NPCI, Verification of Bank KYC by the employer using DSC, Seeded Aadhaar Number verified by UIDAI among others.”

Has EPFO specified eligibility criteria?

They might not have detailed the eligibility criteria. Here are some possible scenarios:

Validated Bank Data: If your bank details have already been verified through KYC or another method you might not need to submit any additional documentation.

Claim Amount: The relaxed requirements might apply to claims below a certain amount.

For an EPF claim, the ideal supporting document is an original, cancelled check that clearly shows your name, bank account number and IFSC code. This document confirms your bank account details and ensured your claims are settled.

How to Submit an Online EPF Claim

You can file an online claim through the EPFO member site. Here’s a general guideline but you must always check the official EPFO website for the latest updates:

Eligibility Requirements:

– You must have a valid Universal Account Number (UAN) and be a registered member.

– Your Aadhaar number, bank account number and other Know Your Customer (KYC) details need to be seeded and validated in your UAN account.

Here’s how you can file an online claim with EPFO:

– Visit the EPFO Member Portal: Go to https://unifiedportal-mem.epfindia.gov.in/ and log in using your UAN and password.

– Navigate to the Claim Section: Once logged in, find the “Claim” section in the member portal.

– Select Claim Type: Choose the type of claim you want to submit, such as pension or full settlement.

– Verify KYC Information: Your KYC details should be pre-filled based on the data you submitted. Make sure these details are accurate, and update if necessary.

– Online Verification: Instead of uploading documents, online verification methods may be used based on the circumstances and recent relaxations.

– Upload Documents if Required: In some cases, you may still need to upload scanned copies of documents, such as a canceled check or an attested bank passbook copy. Refer to the EPFO website for the latest document requirements.

– Submit the Claim: After verifying all information, submit your claim application.

– Track Claim Progress: You can monitor the progress of your claim application through the portal.

Science & Environment

EPFO Adds 14.41 Lakh Members In March, 57 Per…

20 May 2024
by admin

New Delhi: The Employees’ Provident Fund Organisation (EPFO) payroll data released on Monday shows that as many as 14.41 lakh net members in March this year, reflecting the increased employment created in the country’s organised sector during the month.

The data indicates that around 7.47 lakh new members have been enrolled during March out of which the 18-25 age group constitutes a dominant 56.83 per cent. This indicates that “the majority of individuals joining the organised workforce are youth, primarily first-time job seekers,” according to the official statement.

Gender-wise analysis of payroll data unveils that out of 7.47 lakh new members, around 2 lakh are new female members. Also, the net female member addition during the month stood at around 2.90 lakh. The female member addition is indicative of a broader shift towards a more inclusive and diverse workforce, the statement added. (Also Read: 7th Pay Commission: Setback For Govt Employees; 25% Increase In Gratuity Due To Da Hike Kept On Hold By EPFO)

The payroll data highlights that approximately 11.80 lakh members exited and subsequently rejoined EPFO. These members switched their jobs and re-joined the establishments covered under the ambit of EPFO and opted to transfer their accumulations instead of applying for final settlement thus, safeguarding long-term financial well-being and extending their social security protection.

Month-on-month comparison of industry-wise data displays growth in the members working in establishments engaged in the manufacture, marketing services, usage of computers, restaurants, chartered, fish processing and non-veg food preservation, Beedi making etc.