Over the past two years, 27 exempt establishments have chosen to let the Employees’ Provident Fund Organisation (EPFO) directly manage their employees’ provident funds.
In a press release on Sunday (14 July, 2024) EPFO said, “In the last two years, 27 establishments have surrendered their exemption, adding about 30,000 employees and an amount of Rs. 1688.82 crores to the Fund under the Employees’ Provident Fund Organisation (EPFO).”
The improved services provided by EPFO have been a key factor behind this trend. Faster claim settlement, higher rates of return, strong monitoring, and ease of engagement have contributed to the growing confidence in EPFO’s management of PF. This has led to establishments focusing more on their core business activities while leaving the PF management to EPFO, according to the release.
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Over the past year, EPFO has taken steps to make it easier for exempted establishments to comply with regulations. They have published clear standard operating procedures (SOPs) and manuals for these companies.
New Portal to be Launched Soon
Employees’ Provident Fund Organisation also plans to introduce new software and a portal to simplify the process of surrendering exemptions. This move marks a significant step towards digitization.
Companies that want to manage their employees’ provident fund (PF) collections independently must seek exemption under Section 17 of the EPF Act. This exemption allows them to operate their own PF Trust without making statutory contributions to the EPFO.
Also Read: EPFO Introduces Auto Claim Settlement for Education, Marriage and Housing
As of 31st March 2023, 1,002 establishments manage Rs 3.2 lakh crore for 31.2 lakh members. These companies are required to provide benefits that meet EPFO standards and comply with the conditions outlined in the EPF Act.
The increasing focus of EPFO on its stakeholders and the steady returns generated by the funds have contributed to the growing trend of companies surrendering their exemptions.
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