EPFO works on plan to introduce ATM card facility for withdrawal of funds

“Efforts are being made to improve the IT platform and other processes at the EPFO over the last 5-6 months. These changes are being done under the EPFO 3.0 plan. We want to roll out this feature where EPF members have a card equivalent to an ATM card, and then in a bank-type facility, they get to withdraw their money, subject to a certain ceiling, say, 50 per cent. Why should any approval be sought by people to withdraw their own money? This is the idea behind this proposal,” a senior official told The Indian Express.

Once the ceiling is fixed for the withdrawal amount, there should be no other permission required for EPF subscribers to withdraw from their corpus by just swiping a card, the official said.

On similar lines, the EPFO is also planning to make pension contributions flexible. In this proposal, employees will have the flexibility to contribute more or less than the existing 12 per cent ceiling to the Employees’ Pension Scheme (EPS).

“Some people might want to contribute 10 per cent of their wage towards pension, others might want to contribute 12 per cent or 15 per cent. Some people want to contribute for a certain number of years and then stop later. This flexibility has to be given somewhere to the employees and we are working in that direction,” the official said.

As of now, employees do not contribute to the pension scheme under EPS. Both employees and employers contribute 12 per cent of the employee’s basic salary, dearness allowance and retaining allowance, if any, to the EPF. The employee’s entire contribution goes to EPF, while the 12 per cent contribution by the employer is split as 3.67 per cent to EPF and 8.33 per cent to EPS. The Government of India contributes 1.16 per cent of an employee’s pension for those below the wage threshold of Rs 15,000.

Amid concerns over a high rate of rejection of EPF claims, the Ministry of Labour and Employment has been taking measures over the last few months to improve the claims settlement rate.

The EPFO has introduced auto claim settlement, that is, automatic processing of claims without any human intervention for advance claims up to Rs 1 lakh for education, marriage and housing to eliminate corruption.

Officials said around 25-30 per cent of the claims are being processed without human intervention.

In a bid to check instances of corruption and illegal gratification, as The Indian Express had reported earlier this week, the EPFO has also compulsorily retired as many as 12 officers on corruption charges in the last two months and suspended 18 officials.