Retirement fund body Employees Provident Fund Organisation (EPFO), as part of its reach out program to employees, has started with a practice that will reduce the number of cases where companies claim that the PF has been deposited, but the employee finds it has not been.
EPFO in due time is planning to implement a system that will send out messages to employees about contributions that have not been deposited by the employer for a particular month. The EPFO at the moment sends messages of credit to EPF accounts to employees. In a press release, the organisation said that it has so far been "intimating its members by way of SMS on credit of their respective monthly contribution into their accounts."
"It has been decided that an intimation by way of SMS or email shall be sent to members in respect of whom contribution has not been deposited by the employer with EPFO for a given month in due time," read the statement.
The current exercise from the EPFO will ensure that employees whose contributions have not been deposited will get an intimation saying that the deposits are pending. The employee will thereby be armed to take up necessary steps such as reminding their employees of depositing the PF amounts.
The SMS will be sent to those employees who have registered their mobile number or email ID in their Universal Account Number (UAN).
The Employees' Provident Fund is an investment as well as a tax-saving component for many. The employer deducts 12% from the salary of an employee and adds another equivalent sum to the monthly contribution. The final amount at the end of the year adds to the employee' savings and it also attracts an interest.
In recent times, experts indicate that the EPFO has taken up some concrete steps to help low paid employees. Many of these are tech-enabled solutions. For instance, the organisation has started sharing data such as necessary updates via the Umang (Unified Mobile Application for New-age Governance) app. Employees, who do not have a smartphone, can register their mobile phones and give a missed call on on 011-22901406 for updates.
The EPFO is also working on a default management framework to pull up employers that do not deposit the employee contributions on time. As a rule, employers must credit EPF contributions by the 15th of the month or pay a penalty and the interest charges. Although cases of wrong filings were reported by many employees in the past, the system at the moment does not leave any scope for errors. An employer is supposed to fill all challans and ensure that compliances are met.
Although the availability of an SMS may reduce errors on the part of employers, experts shared mixed opinions saying that the SMS updates for credit to registered EPF holders were not up to the mark.