Customer Friendly Face of EPFO : Digital Initiatives
Employees’ Provident Fund Organisation (EPFO), a Statutory Body, Ministry of Labour and Employment ranks among the world’s largest social security organizations in terms of membership and fund size. The number of accounts is around 15 crore and almost 5 crore subscribers are regularly contributing to the fund. The organization also has been settling more than 1.00 crore claims annually for the past few years. The work involved in all the spheres of EPFO’s functioning including enforcement of the Act across the country, maintenance of individual accounts, settlement of claims, investment of funds, ensuring prompt pension payment and updating records is very complex and sensitive to say the least. The recent past, especially in the last 1-2 years has seen many new initiatives being taken to transform the functioning of the organization to enable better service to all its stakeholders in tune with the government’s motto of minimum government and maximum governance.
EPFO is on way to transform the benefit delivery mechanisms by adopting IT enabled tools and techniques. EPFO will become truly paperless and extremely subscriber/citizen friendly in the days to come. Recently EPFO got SKOCH Award for Smart Governance for its initiatives on UAN Programme and Transformation of Social Security Agenda in India, the 5th Award in the last two years. Some of EPFO’s major initiatives receiving appreciation are: Distribution of pension to the pensioners on the first day of the month, Online Registration of establishments, online submission of returns and remittances by the employers through Net-Banking and Online facility for filing of statutory returns by PF exempted establishments. Besides launching Mobile Application, SMS based UAN Activation and Missed Call services for EPF members, the EPFO has also done away with the mandatory requirement of affixing one rupee revenue stamp on claim forms simplifying procedure and bringing relief to millions of PF subscribers every year. This move could be possible as no revenue stamp is required to be fixed in respect of payment made through NEFT (National Electronic Funds Transfer).
1. Universal Account Number (UAN): The UAN progamme was launched in October, 2014 as part of Pandit Deen Dayal Upadhyay Shramev Jayate Karyakaram. It is perhaps the most radical step taken by EPFO in the recent past. UAN allotted by EPFO to each of its subscribers is designed to act as an umbrella for multiple member IDs allotted to the same individual on account of different employments. UAN serves twin purpose of enabling EPFO to identify the member without intermediation of the employer and also ensuring speedy, transparent and efficient service delivery to the member directly. The UAN database is seeded with various KYC details for foolproof identification of the member and to enable e-driven services. Activating UAN, enables the member to access a host of services like downloadable dynamic UAN card, updated details of PF accounts, auto trigger of transfer request while changing employment etc.
Initially, EPFO issued UAN to 4.17 crore contributing members. Thereafter, the organization allots UAN on continuous basis to all new entrants while old members are allotted on making a request. EPFO keeps insisting employers covered under the EPF and MP Act, 1952 to seed the necessary KYC details and enable the individual EPF members to activate their UAN. By September 2015, 5.5 crore UAN have been alloted. Almost 2.00 crore EPF members have activated their UAN and are able to access the enhanced services available to them.
2. Benefits delivery through e-payment mode: EPFO has opted for National Electronic fund transfer (NEFT) for payment of PF amount to EPF members. In the current financial year, 2015-16, more than 98% of the cases are being sent through electronic mode resulting in faster and safer credit to the members’ bank account. Also CCPAP (Corporate Client Cheques payable at par) facility was launched to minimize chances of fraud and to enable electronic payment.
EPFO is using Core Banking Solution (CBS) facility of banks for crediting pension every month to over 50 lakh EPF pensioners. This ensures twin benefits that EPS pensioners get pension on the first working day of the month and EPFO saves substantial amount to the tune of about Rs. 20.00 crore per annum in the process.
3. Implementation of minimum pension: The quantum of pension received by EPS pensioners sometimes even 10 or 20 rupees per month was made Rs.1000 as the least minimum pension guaranteed to the EPS pensioners from September, 2014. For implementing this landmark decision, the Central Government readily agreed to bear the financial burden estimated to be around 750 crores per year. Moreover, provision of minimum pension @1000 p.m has been approved for perpetuity by the Central Government in April 2015.
4. Online Transfer Claim Portal (OTCP): Transfer of PF from one account to another with change of job was considered to be a time consuming sticky point. To address this, an online facility (OTCP) was launched enabling a member to submit his application online for transfer on change of employment. The request digitally authenticated by employer concerned could be then submitted to EPFO for affecting the transfer. This has resulted in virtually zero paper movement between EPFO offices increasing manifold, the speed in effecting the transfer and easy monitoring of pendency. More than 7 lakh transfer claims have been handled through this facility till date. In December 2014, facility for transfer from exempted establishment to unexempted establishment and vice versa was also introduced.
5. Revised timeline for settlement of claims: Earlier, the mandatory timeline for settlement of PF claims was 30 days. With the improvement in service delivery standards, the timeline has been brought down to 20 days. The new timelines have come into effect with effect from the month of July 2015. EPFO is settling more than 96% of the claims within the stipulated 20 days. More than 40% of these are settled within 03 days and almost 80% within 10 days. This achievement is remarkable in view that around 11 lakh claims are settled every month.
6. Participation in Equity Market: Investment of funds by EPFO is a prime function to enable it to pay an attractive rate of interest to the subscribers. Regular periodic evaluation and monitoring performance of portfolio managers enabled EPFO to give an improved rate of interest to the stakeholders @8.75% p.a. Taking advantage of the greater flexibility and increased avenues afforded by the revised pattern of investment, EPFO took its first steps into the equity market in August 2015. It was decided to test the waters by opting for the relatively safe route of investments through ETF (exchange traded funds) (Initially, 5% of the incremental corpus).
7. Online Registration of Establishments: For greater ease in registering the coverable establishments with EPFO, an online facility has been introduced in June 2014. This has eliminated need for inspection of establishments prior to its coverage by inspectors and has made acquiring a PF code number simple, transparent and hassle free. By November 2015, more than 78,000 establishments have benefited by taking their PF code number online. This facility has been integrated with e-Biz portal of the Government of India in February 2015 thereby contributing to greater ease in doing business.
8. Multi banking facility and reduction of administrative charges: The compliance cost to employer has been further reduced as a facility has been given to remit the PF dues through 56 banks instead of only State Bank of India. Also, the rate of administrative charges has been brought down from 1.10% to 0.85% w.e.f January 2015 which is a major relief to the employers covered under the Act.
9. Certificate of Coverage: For the benefit of International Workers, an online fillable form was launched to generate Certificate of Coverage (CoC). This centralized software is used for generating Certificate of Coverage to EPF members working in countries having Social Security Agreements with India. Using this, almost 70,000 members have been issued Certificate of Coverage. Social Security Agreements have been finalized with 19 countries and such agreements are operational in 14 countries including Finland, Sweden, Norway and the Czech Republic.
10. Actuarial Valuation: For assessing the health of any fund the actuarial valuation is needed at regular intervals. For the first time since the inception of Employees’ Deposit Linked Insurance Scheme, 1976 the actuarial valuation of EDLI scheme was done in January 2015.As a result, EPFO has proposed a substantial raising of the insured amount from Rs. 1.30 lakh to Rs. 6.00 lakh. The actuarial evaluation of Employees’ Pension Scheme, 1995 was also done and by providing of better data quality to the actuary, the estimated shortfall was brought down from the earlier Rs. 60,000 crore to only Rs. 7,000 crore.
11. Accounts updating: For updating of accounts on top priority, a new mechanism was devised adopting new software to credit the interest in member’s account in an automatic manner at the end of the financial year. In a historic first, on 1.4.2015, the first day of the financial year, more than 15 crore accounts of the EPF members were updated with the interest for the year 2014-15. To ensure a more robust accounting system, proposal to introduce double entry accounting system is under consideration.
12. MIS and Data cleaning: In a major initiative, a massive data cleaning exercise was launched which would result in near error free and duplication free data base. Management Information System (MIS) was also reworked and an online system has been introduced. Physical information collection has been scrapped from the financial year 2015-16
13. Inoperative Accounts Online Helpdesk: EPF accounts with no contributions received for 36 months were termed inoperative and no further interest was credited to such accounts. Noticing large number of inoperative accounts, an online helpdesk was setup in February 2015 at EPFO’s website to help EPF members track their old Inoperative PF accounts, settle them or get them transferred to present account. Facility is provided to the members to give only the details of his / her previous employment to the extent known along with personal details. Only bare essential fields are mandatory like name, date of birth and mobile number. The mobile number is verified through PIN and a reference ID is created on the Online Helpdesk for future reference.
14. Short code SMS service: A short code SMS service was launched in March 2015 for EPF members. Using this service, the member with activated UAN can send an SMS from his registered mobile number to 7738299899 to access details of KYC status, last contribution, total PF balance etc. The format of the SMS is EPFOHO<UAN>LAN. LAN denotes the first three character of the preferred language in which the member desires to get the details. This facility is available in 10 different major Indian languages including English and Hindi. This facility has been used for more than 2 lakh times byNovember 2015.
15. Mobile governance: EPFO has initiated a number of steps to move from e-governance to m-governance.To facilitate access to services through hand held devices; a mobile application was unveiled in September 2015. The new mobile app can be downloaded from the EPF websitewww.epfindia.gov.in. Activation of UAN can be done through mobile phones and all PF related details and facilities can be accessed through this application. EPS pensioners too can access pension disbursement details through this app. The employer can view remittance details of his establishment. More than 1.31 lakh downloads of the application have taken place since it’s launch.
16. SMS based UAN activation: Using the mobile app, Members can activate their accounts by sending an SMS to 7738299899.Activated, member gets all the enhanced services envisaged in the UAN progamme such as e-passbook, PF credit alerts etc.
17. Missed call service: A missed call service was launched in September 2015 to provide the UAN activated members with all PF related details by means of giving a missed call at number 011-22901406. On a missed call, EPFO reverts to the member with details of his PF accounts. This feature has been used 56 lakh times since introduction.
18. Electronic Returns for exempted establishments: Adoption of IT based tools to monitor exempted PF trusts has made submission process of monthly returns by such establishments less tedious and minimized common errors of manual submission of returns. More than 1,500 exempted establishments have used this facility. This software has made compliance monitoring easy by EPFO. Third party monitoring by appointing independent CAs was also initiated for the first time. For the first time, the rates of surcharge for past irregularities in running of the establishments were finalized and due amounts recovered.
19. Greater facilities for EPF members: Since member account is credited every month and data is received and reconciled electronically, UAN based e-passbook launched in October 2014 can be accessed by a member any time. Earlier a member could access his account details only once in a year on receipt of annual statement of accounts.
Know your claim status link and Know your PF balance link are available to keep track of claim status and PF balance by visiting the EPF website anytime besides SMS based facility for accessing information.
20. Establishment search facility: Using this facility, members can verify the PF code numbers of their establishments and their names figuring in remittances made by the employers for any particular month. This is equally helpful to employer who can keep a tab on the contractor who enrolls and engages workers and can verified workers’ names.
21. Information and alerts through SMS: From October 2014, EPFO is sending SMS to the UAN activated members on their registered mobile numbers regarding their monthly PF contribution. Likewise, an SMS alert is sent to employers in case of non submission of returns or non deposit of PF dues.
22. Reduction in SBI’s collection rate: After negotiations SBI decided to reduce their collection rates. This would result in savings of an estimated Rs. 100 crore for the organization. Also, with employer’s gradual compulsorily remitting the PF contributions through internet banking, collection cost to EPFO have further fallen.
23. Grievance Redressal: Grievance redressal of the EPF members and the employers was accorded top most priority. As a result, about 80% of grievances are pending within 7 days and 97% of grievances are pending within 15 days only. By systematic monitoring at the head office level, the pendency has drastically come down from 20,000 grievances to only 2000-3000 grievances on any given day which is a minuscule figure when seen against the 15 crore accounts being handled by EPFO.
In brief, EPFO is ready with customer friendly facilities to serve the tech savvy young generation of workers. Database updated up to the mark and growing use of e-services will streamline hiccups of transforming the benefit delivery mechanisms in times to come.