The Employees’ Provident Fund Organisation or EPFO has approved the development of centralised IT-enabled systems after which employees will not have to get their PF fund transferred when they change jobs.
After the development of the systems by the Centre for Development of Advanced Computing or C-DAC, an employee’s PF account number will remain the same if they change their jobs and they won’t have to worry about the account transfer.
The field functionalities will move on a central database in a phased manner enabling smoother operations and enhanced service delivery. The system will facilitate the de-duplication and merger of all PF accounts of any member.
The decision was taken at the 229th meeting of the EPFo’s top decision-making body, the Central Board of Trustees (CBT), headed by Union labour minister Bhupender Yadav.
The retirement fund manager has also decided to empower its advisory body Finance Investment and Audit Committee (FIAC) to take a call on investing in new asset classes.
“At present, we have decided to invest in only newly added government instruments (bonds and InvITs). There is no percentage for that. It will be decided on a case to case basis by FIAC,” Yadav said after the meeting.
The National Highways Authority of India (NHAI) and Power Grid Corporation (PGCIL) have launched public sector infrastructure investment trusts (InvITs). The EPFO would consider only public sector bonds and InvITs.
The board decided to empower FIAC to decide upon the investment options, on a case-to-case basis, for investment in all such asset classes which are included in the Pattern of Investment as notified by the Union ministry of finance for provident and pension funds in India, an official statement said.
Union labour secretary Sunil Barthwal told reporters, “If we want to provide a high rate of interest then we have to follow guidelines of the finance ministry. There are certain instruments (prescribed in norms) where we were not able to invest due to various reasons. Now, we would be in a position to invest in those instruments.”
The government recently added new instruments like InvITs in the Pattern of Investment for pension funds.
“We will invest in those InvITs or bonds where we would get the security of funds as we are trustees of the employees’ provident fund. We will focus on return maximisation but also keep in mind the security of funds,” he noted.
The EPFO has also decided to constitute four sub-committees, comprising members of the board from employees’ and employers’ sides as well as representatives of the government.
The committees on establishment related matters and futuristic implementation of the Social Security Code will be headed by the minister of state for labour and employment. The Union labour and employment secretary will head the remaining two on digital capacity building and pension related issues.
The draft 68th annual report on the functioning of the EPFO for the year 2020-21 was also approved in the meeting with the recommendation to place it before Parliament.
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