The Aadhaar has changed the EPF experience. It would end most of your EPF related problems. Be it online 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, Aadhaar has also changed the functioning of Employee’s Provident Fund. The EPFO is trying to marry the UAN with Aadhaar. It has solved the problem of authentication in one stroke. Before going into the details of Aadhaar benefits we should understand the useful features UAN and Aadhaar.
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 AAadhaar
The Aadhaar 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 Aadhaar. Indeed, It is a fool-proof document. Moreover, the Aadhaar has your address, bank account number and phone number. Hence, a government agency can access all of your personal details using the Aadhaar number.
It also means that your identity can be verified through the Aadhaar. There would not be any forgery because of the Aadhaar Authentication.
How Will AAadhaar 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, Aadhaar would be very handy. Because, Aadhaar has all the details of a person. The EPFO can directly deal with the member on the basis of Aadhaar data. The EPFO can be assured of authenticity of the member. It would not hesitate to deposit EPF corpus on the Aadhaar linked bank account of the member.
What Would Aadhaar Change
The EPFO has asked the employers to give the Aadhaar number of its employees. The EPFO is trying to link all the UAN with Aadhaar. But, For the first time, it needs employer’s approval to linking an Aadhaar with the UAN. Unfortunately, Employer are very slow in this regard. They are not approving the Aadhaar. Out of total 81.13 million UANs, the EPFO has the Aadhaar number of only 19.67 million members. Among these, only 16 million Aadhaar numbers are approved by the employers.
Finally, EPFO has put pressure on its regional offices to get Aadhaar number of all the active members till 31 December 2016. Active members are those who contributes to their EPF account. Once, Aadhaar is linked to the UAN, you can expect following benefits.
As of now, EPFO can’t process your direct EPF withdrawal request because it is not sure about the authenticity. But once Aadhaar 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 Aadhaar, you can withdraw EPF balance without going to the employer. You can also partially withdraw PF while in the job.
The EPFO would launch the Online EPF withdrawal after a majority of employees submit their Aadhaar 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 Aadhaar 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 Aadhaar, you can easily rectify the error in member’s personal details. On the basis of Aadhaar data, a member can apply to change the data. Since Aadhaar 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 Aadhaar would also make the bank account number change very easy. You would be able to change bank account number on the basis of Aadhaar database. However, your Aadhaar 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, Aadhaar 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 Aadhaar number as soon as possible if you don’t have.
- Submit the copy of Aadhaar 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 Aadhaar, 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 Aadhaar 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.