Online PF transfers become a reality; interest on PF accounts may go up

The Employees' Provident Fund Organisation (EPFO) has launched its online transfer claim portal (OTCP), facilitating online transfer of provident fund accounts.

Simultaneously, the retirement fund body is also expected to announce higher interest rate on provident fund deposits for its over 50 million subscribers in the current from the 8.5 per cent provided in the 2012-13 financial year.

EPFO had paid 8.5 per cent interest to subscribers in 2012-13, against the 8.25 provided in the 2011-12.

It had paid 9.5 per cent rate of return for 2010-11.

The FPFO is in the process of calling a meeting of its apex decision making body, the Central Board of Trustees (CBT) headed by the labour minister, to approve the interest rate.

With the launch of online transfer claim portal, filing of online provident fund accounts transfer claims on changing jobs for subscribers has become a reality now, after the EPFO issued an  office circular on 2 October.

"Handling of transfer cases generates maximum bad publicity and it is expected that this issue shall be resolved after OTCP is made fully functional," the circular to EPFO's field staff from Central Provident Fund Commissioner K K Jalan, said.

He has also directed all offices that there shall be no physical movement of paper (either claims or Annexure ''K'') in transferring member accounts from one office to another after 31 October.

Annexure K contains details of service period with an employer and the amount of funds deposited in the pension fund account of the subscribers who seek transfer of PF accounts.

The facility of online transfer of provident fund accounts will reduce the work load of the body substantially as over 1.3 million applicants files such claims every year.

EPFO has set up a central clearance house for this purpose, which will help to reduce the time for transfer of PF accounts to three days through the online service.

The EPFO started registering digital signatures of companies from 25 July, a prerequisite for the facility. The body managed PF accounts of about 6.9 lakh establishments in 2011-12.

At present, over 30,000 employers or establishments have already registered their digital signatures with EPFO.

According to the information available, 80 per cent of the firms employing more than 500 workers have already registered their digital signatures with EPFO. Job changes are more frequent in big firms employing more than 500 workers, especially in sectors such as information technology.

During 2012-13, the EPFO claims to have settled 10.76 million claims, 88 per cent of which were processed within 30 days, as prescribed by the body's citizen charter.

The EPFO expects 12 million claims in 2013-14, including around 1.3 million PF transfer claims, largely from IT sector companies.