The Adhaar would change the EPF experience. It would end most of your EPF related problems. Be it EPF withdrawal or mistake in personal data, there would not be any hassle. Rather, you would enjoy the smooth EPF ride. You should know that the government is pushing hard to make the EPF user-friendly. It has taken many steps in this direction. You would agree that since last 3 years EPF has changed a lot. Now you can easily check EPF balance status. The EPF transfer has become online and often it is done automatic thanks to the UAN.
Like UAN or universal account number, Adhaar would also change the functioning of Employee’s Provident Fund. The EPFO is trying to marry the UAN with Adhaar. It will solve many problems of authentication in one stroke. Before going into the details of Adhaar benefits we should understand the useful features UAN and Adhaar.
Features of UAN
UAN or Universal account number is a unique number given to EPF members. Once you get this number, you have to use this for every job. It does not change with the change of job. Becuase of the same UAN in different jobs, the EPF transfer can be done on the basis of UAN. Even new employer can fetch your personal details from the UAN database using your UAN. The UAN has ended the many hassles of EPF transfer. Becuase of the UAN, now you can transfer EPF online. Even, EPFO transfers EPF balance itself once you quote the existing UAN to the new employer.
Features of Adhaar
The Adhaar is the ultimate identity document. It has the fingerprint data of all the fingers and image of iris. Since no two persons have the same fingerprints and iris, you can have only one Adhaar. Indeed, It is a fool-proof document. Moreover, the Adhaar has your address, bank account number and phone number. Hence, a government agency can access all of your personal details using the Adhaar number.
It also means that your identity can be verified through the Adhaar. There would not be any forgery because of the Adhaar Authentication.
How Will Adhaar Help EPF?
The EPF scheme is run by the government body EPFO. But EPFO don’t have the manpower to manage the enrollment and collection of contributions. Therefore, it entrusts these works to the employers. The employers register its employee to the EPF scheme. It also collects the EPF contribution and deposits to the EPFO.
In fact, employers act as the intermediate agency of the EPFO. Becuase of this intermediate role, the employer commands authority over the EPF scheme. The employees are dependent on the employer for EPF related works. The employers give personal detail, contribution detail, date of joining, date of leaving and KYC details of an employee.
However, employer are not directly accountable to EPFO. Neither it gets any money to perform these tasks, therefore you see a laxity by the employers. To overcome this problem, EPFO is working to reduce the employer’s role. It is working to get back the authenticator role from the employers. EPFO want that once a member gets registered, It should directly deal with the EPFO. Further it should not approach to employer for any approval or attestation.
To achieve this goal, Adhaar would be very handy. Because, Adhaar has all the details of a person. The EPFO can directly deal with the member on the basis of Adhaar data. The EPFO can be assured of authenticity of the member. It would not hesitate to deposit EPF corpus on the adhaar linked bank account of the member.
What Would Adhaar Change
The EPFO has asked the employers to give the Adhaar number of its employees. The EPFO is trying to link all the UAN with Adhaar. But, For the first time, it needs employer’s approval to linking an Adhaar with the UAN. Unfortunately, Employer are very slow in this regard. They are not approving the Adhaar. Out of total 81.13 million UANs, the EPFO has the Adhaar number of only 19.67 million members. Among these, only 16 million Adhaar numbers are approved by the employers.
Finally, EPFO has put pressure on its regional offices to get Adhaar number of all the active members till 31 December 2016. Active members are those who contributes to their EPF account. Once, Adhaar is linked to the UAN, you can expect following benefits.
Online EPF Withdrawal
As of now, EPFO can’t process your direct EPF withdrawal request because it is not sure about the authenticity. But once Adhaar is linked, EPFO can itself authenticate and process the EPF withdrawal application. It would directly deposit the EPF corpus to your bank account. Today itself, if your UAN is linked to Adhaar, you can withdraw EPF balance without going to the employer.
The EPFO would launch the Online EPF withdrawal after a majority of employees submit their Adhaar and employers approve it. You can expect this service before 31 March 2017.
EPF Pension Fixation
The EPF pension fixation would also become online. The Adhaar would give all the required data for pension fixation. The EPFO can fix pension of an employee using DOB, and bank account of the member. You can expect this service before end of the FY 2016-17.
EPF Name correction
With the linkage of UAN and Adhaar, you can easily rectify the error in member’s personal details. On the basis of Adhaar data, a member can apply to change the data. Since Adhaar is already approved by the employer, there would not be a need of employer’s approval.
Bank Account Change
The EPFO has not talked about it, but I assume that Adhaar would also make the bank account number change very easy. You would be able to change bank account number on the basis of Adhaar database. However, your Adhaar number should have the correct bank account number.
The role of employer would end
Often employer’a arm-twist the employees using EPF approvals. Till now, employers can hold the rectification application and EPF withdrawals. But once, Adhaar is linked to the UAN, the employher would lose the handle. The Employee would be free from the clutches of employer.
Your To Do list
- Get a Adhaar number as soon as possible if you don’t have.
- Submit the copy of Adhaar to your employer while you are joining a job or within a job.
- Give details of bank account and PAN to Employer.
- Check whether your employer has approved the Adhaar, PAN and Bank Account. You can do it through the UAN member portal. These three approved KYC details would be enough to give the PF power in your hands.
Of course the Adhaar would make EPF withdrawal very easy but it does not mean that you should rush to withdraw it. Rather, you should keep money into the EPF account as it gives highest interest among all the saving schemes. Also, now your EPF account don’t turn inoperative because of non contribution. You would keep getting interest on EPF balance.