EPFO vision 2030 eyes windfall for all; here’s how

By: | Published: June 22, 2016 6:26 AM

The Employees’ Provident Fund Organisation (EPFO) has mooted mandatory social security coverage for all adult working citizens by 2030.

EPF interest rate to 8.8%Sources said EPFO has already communicated its vision for 2030 to the labour ministry outlining its strategies, objectives and the action plan after assessing its current operations and service delivery standards.

The Employees’ Provident Fund Organisation (EPFO) has mooted mandatory social security coverage for all adult working citizens by 2030. If the retirement fund body’s proposal is implemented, an additional 50 crore people would get the provident fund, pension and death insurance benefits. Currently, about five crore workers are under the EPFO umbrella.

Sources said EPFO has already communicated its vision for 2030 to the labour ministry outlining its strategies, objectives and the action plan after assessing its current operations and service delivery standards. The labour ministry had asked EPFO to prepare its vision document following a missive from NITI Aayog.

According to the plan, the retirement fund body intends to achieve its vision by doing away with the current membership threshold, wage ceiling and coverage span through an amendment of the extant EPF & MP Act, 1952, to incorporate certain provisions in graded steps. Organised sector employees, including those belonging to the private sector earning less than `15,000 per month, are now eligible for mandatory pension under Employees’ Pension Scheme (EPS). Currently, the minimum pension payable under EPS is `1,000 a month.

Sources said EPFO intends to ensure minimum pension at the rate of 50% of the national floor level minimum wages (NFLMW) for all. The NFLMW was revised to `160 per day from July last year, from the previous `137/day effected from July 2013.

Of the country’s current workforce (47.41 crore as counted in 2011-12), over 90% are in the so-called unorganised sector, which includes tiny industrial units and trading outfits, besides household workers.

The Employees’ Provident Fund (EPF) is a retirement planning tool; a subscriber contributes 12% of his/her basic salary to EPF and the employer also makes a matching contribution. However, of the 12% employers’ contribution, 8.33% goes to the EPS and the remaining towards PF account.

EPFO intends to widely use technology to actualise its stated vision. IT-based mechanisms, structures and processes would be put in place to make available accessible, convenient and hassle-free modes for making contributions by employers. Offices would be opened across all districts of the country to ensure the ease of accessibility for workers and employers for services and ensuring better compliance.

It also wishes to enter into strategic alliance or partnerships with banks, post offices and other local bodies for collection of contributions, payment of benefits and point of presence services like issue of statement of account slips for members, acceptance of claims, etc.

Awareness campaigns would be organised on sustained basis through various media, workshops, seminars and camps among workers and citizens as well as employers and educating them on the benefits of the social security schemes and the rights and obligations of each stakeholder.

The retirement fund body also intends to implement specific services and welfare measures for workers with low wages.

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