EPFO Update: Now employees won’t have to transfer PF; here’s why

EPFO recently announced that it added 15.41 lakh subscribers in September 2021.

New Delhi: The EPFO, or Employees Provident Fund Organisation, recently gave the go-ahead for the creation of centralised IT-enabled systems. Employees will no longer have to transfer money from their provident funds when they move jobs as a result of this.

Even if a person changes positions after the relocation to the Centre for Development of Advanced Computing, or C-DAC, to create the systems, their provident fund number will remain the same. They are not supposed to worry about transferring the accounts as a result of this. The Central Board of Trustees (CBT), EPFO's ultimate decision-making authority, made this decision at its 229th meeting.

Union labour minister of state Bhupender Yadav presided over the meeting, which took place on November 20. "After then, the field functionalities will be integrated into a central database, allowing for smoother operations and improved service delivery." The centralised system will make it easier to deduplicate and consolidate all of a member's PF accounts. It will eliminate the requirement for a transfer of account when a person changes jobs, according to a government statement.

The retirement fund organisation has also decided to give its advisory body, the Finance Investment and Audit Committee (FIAC), more flexibility in deciding whether or not to participate in new asset classes.

"At the moment, we've opted to invest primarily in government securities that have just been added to the market" (bonds and InvITs). There is no such thing as a percentage for it. After the meeting, Yadav was cited as saying, "FIAC will decide on a case-by-case basis."

According to a press release, the Board voted to allow the Finance Investment & Audit Committee (FIAC) to decide on investment choices on a case-by-case basis for all such asset classes that are included in the Pattern of Investment as notified by the Government of India.

"If we want to offer a high rate of interest, we must obey the finance ministry's criteria." We were unable to invest in some instruments (required by regulations) due to a variety of factors. After the meeting, Union labour secretary Sunil Barthwal was cited as saying, "Now we would be in a position to invest in those instruments."

The National Highways Authority of India (NHAI) and the Power Grid Corporation of India (PGCIL) have both launched public sector infrastructure investment trusts at the moment (InvITs). The EPFO is also interested in public-sector bonds.

The government has updated the Pattern of Investment for pension funds to include new products such as InvITs. "It has been decided in principle that the FIAC would make a decision in this regard on a case-by-case basis." The FIAC has been given permission by the CBT to do so. "As with NHAI and Power Grid (InvITs), the FIAC will make a decision," he stated.

In the Pattern of Investment for pension funds, the government has incorporated new instruments such as InvITs. "In principle, the FIAC will make a decision on this matter on a case-by-case basis." The FIAC has been given permission by the CBT to act in this manner. "Like NHAI and Power Grid (InvITs), the FIAC will make a decision," he said.

In a related incident, the EPFO announced on Saturday that it added 15.41 lakh subscribers in September 2021, indicating a continuing trend in net payroll increases following the Covid-19 pandemic's second wave.