While the work on sprucing up its technology-enabled services is still underway, Employees’ Provident Fund Organisation (EPFO) has launched a massive enrollment programme with the broader aim of universalisation of the scheme for all eligible workers.
While the work on sprucing up its technology-enabled services is still underway, Employees’ Provident Fund Organisation (EPFO) has launched a massive enrollment programme with the broader aim of universalisation of the scheme for all eligible workers. The retirement fund body’s CEO V P Joy, in an interview with Surya Sarathi Ray of FE, says at least 50 lakh new subscribers will join in the scheme during the three-month exercise. Excerpts…
EPFO has recently launched an enrollment campaign. How is the success so far?
The three-month enrollment campaign was launched on January 1. We have given a lot of incentives for enrollment of the past workers and new workers. We want universal enrollment of all eligible workers. The window for voluntary enrollment is also open. We have a total of 3.76 crore active subscribers now. With the current enrollment scheme, we hope to rope in a minimum of 50 lakh new subscribers. The final number will come only after March.
What are the incentives that you are offering for enrollment?
For the past workers (workers with their past service), an employer does not have to pay damages and administrative charges on these accounts. Employers will have to remit only their contribution and 12% interest on the amount. If employees’ contribution was not collected, this doesn’t have to be paid. We are also targeting new employees, new establishments and voluntary enrollments. New employers will have to pay just 3.67% with the remaining 8.33% coming from the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) for 3 years. However, for the apparel sector, there is no employers’ contribution for new employees for 3 years.
Do you also plan to bring unorganised sector workers on board?
We have started enrolling workers from some semi-organised sectors like construction. But, the unorganised sector is not covered so far. We have some proposals on this. But, the government has to decide on that.
What about settling claims of a person on the day of his/her retirement as addressed in the Pragathi programme by Prime Minister?
We have already issued a scheme for that. We are now providing final settlement on the date of retirement itself. It is being implemented now.
There were plans to increase the ceiling for mandatory enrollment to R25,000 per month from R15,000 now. Is there any development?
We have sent the proposal to the government (suggesting this change). The government will decide on that.
The Central Board of Trustees (CBT) has recommended for lowering administrative charges to 0.65% from 0.86% now. When the notification is likely? How is it going to benefit the employers?
The government has approved the proposal and the order will come shortly. This will be effective from February onwards. The move will reduce around R1,000 crore burden on the employers in a year.
Don’t you think that even 0.65% is higher?
Employers were paying 1.25% as administrative charges in 2014.
How much have you invested in the ETF so far in the current fiscal?
For the entire 2016-17, we propose to invest R13,000 or 10% of the incremental deposits. We will reach the target by March 31.
What kind of returns you expect from your investment?
Returns from ETF are market-linked. It will depend upon how the market functions.