Even before securing a job, a prospective employee can now have an Aadhaar-linked Universal Account Number (UAN), which is mandatory for depositing provident fund contributions and seeking withdrawal of deposits.
Even before securing a job, a prospective employee can now have an Aadhaar-linked Universal Account Number (UAN), which is mandatory for depositing provident fund contributions and seeking withdrawal of deposits. While the principal idea is to ease the burden of an employer to register a newly-appointed employee, it will also sensitise the youth to the benefits of long-term savings and old-age financial security early in their lives. In 2014, the retirement fund launched the UAN programme in order to merge multiple identification numbers that used to be allotted to a contributing member into a single 12-digit UAN. Using UAN, one can avail himself/herself of all EPFO-related services including deposits, checking passbook, withdrawals, portability and SMS services on registered mobile numbers. Under the present law, it is mandatory for units employing 20 or more persons and earning up to Rs 15,000 a month to provide EPF benefits to workers. While employees contribute 12% of the basic pay to EPF, the employer contributes 8.33% (of the pay subject to Rs 15,000 a month limit) towards the employee’s pension scheme and 3.67% of the pay to the EPF itself.
VP Joy, central provident fund commissioner, told FE that the system for generation of Aadhaar-linked UAN for those who are yet to enter the job world has already started. “We are trying to remove the burden of the employer to register an employee with the UAN. Suppose, if someone is still studying, he can have a UAN and then when he/she joins somewhere, the employer does not need to register him/her with the EPFO – she can straightaway start depositing funds with the EPFO,” Joy said. Giving UAN to people before they get a job will mean that from the very first job an employee is more likely to be covered in PF, especially given the EPFO drive to bring more and more establishments even from SME sector into the PF fold.
Teamlease Services’ vice-president Sonal Arora said instead of allocating one more number by way of a separate UAN number to everyone, the EPFO must explore using Aadhaar itself as a unique account number for the purpose of managing an employee’s PF account. “Already everyone has an Aadhaar and on top of that every formal sector employee would have a PAN number as well, so creating another parallel network is neither required nor efficient. The Aadhaar ecosystem is very robust and should be optimally used across all regulatory bodies,” she said. EPFO currently has around 4.7 crore active subscribers. It gets around Rs 1.5 lakh crore annual deposits from subscribers. The EPFO has also taken a series of subscriber-friendly steps to encourage subscribers with the aim of reducing the premature closure of the account, easy withdrawal of deposits and making the entire procedure online using even mobile phone so that subscribers can check their account on the go. It has also reduced the administrative charges to 0.65% from 0.85% earlier.