In yet another major reform related to Provident Funds, a new Aadhaar based system has been devised which will enable automatic transfer of PF, in case an employee switches jobs.
This can be regarded as a major step towards making Aadhaar-based PF platform more robust and seamless, benefitting millions of employees, pan-India.
Besides, Employees’ Provident Fund Organisation (EPFO) which handles the Provident Funds of the entire nation, has some words of wisdom related to the usage of PF as well.
Aadhaar Based PF Reforms: Automatic Transfer Active Now
Earlier, whenever an employee switches jobs, he or she has to manually close down the existing PF account, and then open up a new PF account in the new company.
With the introduction of 12-digit Universal Account Number, the process became easier, but the transfer of funds in the PF account had to be requested.
But not any more.
As per details emerging, EPFO will now embed Aadhaar into the whole system of PF management, which will allow automatic transfer of PF funds in case of job switch.
Chief Provident Fund Commissioner V P Joy said, “Whenever there is a change of job, a lot of accounts are closed; then they (the employees) restart their account later on. We are trying to ensure transfer of money if one changes jobs, without any application, in three days. In future, if one has an Aadhaar ID and has verified the ID, then the account will be transferred without any application if the worker goes anywhere in the country.”
As per Joy, Aadhaar is now mandatory for enrolment into PF, and this will make the process smoother. He said, “Now we have made Aadhaar compulsory for enrolment. We don’t want accounts to be closed. The PF account is the permanent account. The worker can retain the same account for social security.”
Words of Wisdom From PF Commissioner
While announcing this new development, Chief Provident Fund Commissioner V P Joy also gave away words of wisdom to young and old employees, who are enrolled into PF.
He said that PF funds is a backup fund, and it should be withdrawn only when there is an urgency. As per him, the money saved via PF should be handled with care. He described PF funds as a sort of social security, and a mass level educational and awareness program would be soon carried out, pan-India.
He said, “..Only then will people get social security. So, we are now starting a campaign…to educate people that money must be withdrawn only for essential purposes.”
Earlier, V P Joy had induced a major reform in the whole system, when EPFO introduced Aadhaar based withdrawal process, which reduced the time required to settle claims to 3 hours. Earlier, it used to take months to do the same.
Last year, Govt. had withdrawn tax on the money saved via PF, making the savings essentially tax-free.