Pratik Vaidya explains how EPFO’s new E PRAAPTI portal can help employees recover forgotten PF savings.
In India, the Provident Fund is not only a retirement fund set up by Indian workers themselves. For thousands of employees, it is psychological and financial security wrought by years of work, promotions but also gradual shifts into another place, and transfers along with moves from one position to another.
But one of the biggest issues still encountered by employees is following the trail of older PF accumulations that are sitting in a dormant or disarrayed account.
This problem was all the more prevalent in the pre UAN age where employees had to find new jobs a lot and each employer opened a different PF account for their employees. In many instances, balances were never transferred properly. Years later, employees all at once find missing service history, disconnected PF accounts, or two or more unconnected member IDs when attempting to withdraw funds, claim pension or apply for higher pension benefits.
The scale of the problem is far bigger than most people know. According to an updated report from India, India has more than 31 lakh dormant EPF accounts today, whose unclaimed balances are valued over Rs 10,900 crore. Previous parliamentary revelations had also brought out a spike in dormant accounts, not only in numbers but in terms of the amount accumulated.This is where a meaningful reform is that is in line with EPFOs proposed E PRAAPTI portal.
What is the reform?
E PRAAPTI (Employee Provident Fund Aadhaar Based Access Portal for Tracking Inoperative Accounts) is to provide an easy way to help employees to identify old, inoperative PF accounts back to their current UAN, to know where they belong and connect them again using Aadhaar based verification.
From a business point of view, this solves a longstanding sore point for both employees and employers alike.
For example, we’ve had a few cases where employees transitioning towards retirement ended up discovering out of the blue that one or more old PF accounts have never been combined with their new record. Most times employees might have worked with four or five companies for 15–20 years. Some companies might have closed, contractors might no longer count, payroll vendors may also have changed and records filed years back could be lost or out of trace.
One particular example was of an employee in the manufacturing sector whose service spanned many factories in Maharashtra and Gujarat between 2004 and 2016. One operation had merged into another establishment, and a separate contractor (one of whom the employee had been deployed through) had closed years before. The employee had no recollection of the original PF account information. Rebuilding employment history necessitated the input of vintage salary slips, contribution statements, Annexure K follow ups and regular liaison with several EPFO offices.
One employee from the IT sector experienced the following: two distinct joining-and-exit dates cross-referenced between the PF files due to the employment transition from merger related employment as per previous case regarding him. The employee pensionable service under EPS is thereby fragmented. To resolve the problem required employer notifications, Aadhaar certification, backend reconciliation and multiple follow-up rounds.
Even now, this process relies significantly on past employer collaboration and manual work. Employees change cities, HR teams change, record keepers archive employee records, and retransitioning employment records from fifteen or twenty years ago can be very difficult.
With proper implementation, the E PRAAPTI portal can do much of the former. Once Aadhaar authentication, old member IDs, KYC verification, and UAN linkage are integrated into a searchable framework, employees may no longer have to depend entirely on finding past employers or visit numerous EPFO offices physically.
Practical problems and challenges
There may still be a number of practical problems to solve. The quality of legacy data continues to be a big concern. Old records of PF have also had spelling errors, wrong birth dates, wrong fathers’ names, or out of date mobile numbers. Even where accounts are digitally identified, such issues are created because of closure of establishment and absence of historical record formation (for example, even the closure of establishments and documentation gaps; especially in contractor led environments such as construction, logistics and managing buildings) or if there are gaps in the historical record.
A challenge can also occur where workers generate an excess of UANs inadvertently during various employee tenure. It is also worth noting that some of the older records may also depict wrong exit dates, or incomplete contributions may exist.
Pension continuity under EPS may also prove to be an even greater issue with additional analysis required as the identification of a fund and the authentication for pensions are in many respects very different matters altogether.
This means employees must therefore see E PRAAPTI as a tool that can be used as a tool rather than for paperwork rather than to replace it. Appointment notes, salary slips, PFs, transfer claims and exit documents should still be stored digitally and in a secure manner.
That being said, it is such an important transformation within EPFO of cleaner digital governance and employee centric access.
Conclusion
For thousands of pension pay-outs on the other hand it may be in this day in time that for lakhs of employees who had thought that their old PF savings were in short order buried within the system, E PRAAPTI might finally provide all that they were asking for: a coherent and reliable method to get their (former) retirement money back, and their long-lost work experience.
Pratik Vaidya is Managing Director and Chief Vision Officer of Karma Management Global Consulting Solutions Pvt Ltd.
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