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How to make use of Provident Fund portability through UAN

Provident Fund news

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Sharath Kumar
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NEW DELHI, INDIA: Gone are the days when employees had struggle with multiple Employees Provident Fund accounts on change of jobs. The provident fund portability through the Universal Account Number (UAN), launched by Prime Minister Narendra Modi,  is all set to help over 4 crore subscribers to transfer the funds lying in their provident fund accounts one unique number when they change jobs.

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Universal Account Number (UAN) for members:

The introduction of the Universal Account Number (UAN) will facilitate the members with a slew of member centric facilities such as:

  • Personalized member log-in
  • Down-loadable UAN cards, member passbooks etc.
  • Portability of PF Account number across different employments by linking the old accounts of the member with the UAN
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How it works:

  • The Universal Account Number is key to provident fund portability and easier PF transfer. The UAN will be portable throughout the working career of employees and can be used anywhere in India.
  • This Universal Account Number will be linked to employees' provident fund accounts.
  • This new process is expected to help employees transfer their PF money instead of withdrawing it when they change jobs.
  • The provident fund accounts of employees will be now be updated monthly and at the same time they will be informed through SMSes.
  • The Universal Account Number (UAN) however becomes portable only when it is seeded with Know Your Customers (KYC) details like bank account number, PAN, Aadhaar etc verified by the employer.
  • Employees can check if UANs have been allotted to them on the Employees' Provident Fund Organisation's (EPFO) website or with their employers.
  • Employees need to activate their UANs on the EPFO website to download UAN cards, view updated PF account, file and view transfer claims, and also update KYC information.Initially, UAN will be has been allotted to employees whose PF contribution was received between 1 January and June 30, 2014,  Employees' Provident Fund Organisation said on its website.The launch of Universal Account Number will also enable subscribers to consolidate all their previous accounts. Approximately Rs. 27,000 crore is currently lying with Employees' Provident Fund Organisation (EPFO) in inoperative accounts.Inoperative accounts are those where there have been no contributions for the last three years and they earn no interest.Universal account number has long been a pending demand of even employers. It is expected that the operationalision of allotment and deployment of the UAN will substantially lower the cost of compliance and save the employer from verification of various claims made by employee to EPFO.

EPFo officials are quoted saying that the efforts to do this were first started in 2001. “Then, we had called it the Social Security Number (SSN). The required levels of digitization could not be achieved then and it was dropped. Then, 2009-10 onwards, we started digitizing all our data, and that enabled us to make a shift to UAN in a matter of a few months this year as this was complete in all 120 offices,” said an official.

Between January and June, all members were identified only leaving those whom employers had certified as having left their jobs. “As of now, all users are in the new system once they log in and activate it. New persons joining an organization will be added to the same system,” said an official. “Aadhaar is part of KYC. We are in discussions with UID officials to learn how to shift to the same ecosystem over time,” he said.

Says Amit Gopal, senior vice-president, India Life Capital Pvt. Ltd, an investment and legal consulting firm in retirement benefits: “It will make EPF a genuine social security programme, instead of being a savings bank account, by reducing transmission losses. This will also mean that the EPFO will hold less liquid cash as employees won’t blindly opt for settlements and will be forced to transfer instead. Employees will also benefit through higher investment returns."