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An incentive scheme from the PF Department

If you thought that regulatory authorities are all about coercing us into submission by instilling the fear of punishment, you may have to think again. The Employee Provident Fund Organization, commonly referred to as the Provident Fund Department, has announced an incentive scheme in order to motivate employers to complete Universal Account Number (UAN) related formalities.

The PF Department introduced the UAN as the unique identifier for each PF member over a year ago. According to the PF Department:

The UAN will act as an umbrella for the multiple Member Ids allotted to an individual by different establishments. The idea is to link multiple Member Identification Numbers (Member Id) allotted to a single member under single Universal Account Number. This will help the member to view details of all the Member Identification Numbers (Member Id) linked to it. If a member is already allotted Universal Account Number (UAN) then he / she is required to provide the same on joining new establishment to enable the employer to in-turn mark the new allotted Member Identification Number (Member Id) to the already allotted Universal Identification Number (UAN).

The UAN is critical for the efficiency of processes (access to updated PF account information, triggering of transfer request when an employee moves from one employer to another, etc.) related to PF management. As part of UAN formalities, there are tasks that need to be completed by both the employer and the employee. These include completion of “Know Your Customer” (KYC) and UAN activation. According to information released by the PF Department, while over 6 crore UANs have been allotted, the basic formalities (seeding of UANs with PAN/Aadhaar and mapping of employee’s bank account to the UAN) are yet (as of Feb 2016) to be completed for over 1.5 crore UANs. Also, given that UANs are not required to be stated in the monthly PF-ECR at the time of PF remittance, many employers do not complete UAN formalities as part of onboarding of new joinees.

In order to motivate employers to complete UAN formalities, the PF Department, in a recent circular, has announced a couple of incentive schemes by which employers can receive a refund of a portion of the administrative charges paid to the PF Department.

Incentive Refund Scheme A

An establishment can claim refund of 10% of the administrative charges by meeting the following conditions each month:-

(i) Providing member’s details as required under Form No. 11 (New) (80% or above)

(ii) Seeding of all the three i.e AADHAAR (at least 80% of (i) above, bank account (100% of (i) above) and PAN (wherever applicable).

(iii) UAN activation (100% of (i) above)

Incentive Refund Scheme B

An establishment can claim refund of 5% of the administrative charges by meeting the following conditions each month:-

(a) Providing member’s details as required under Form No. 11 (New) (60% or above).

(b) Seeding of all the three i.e AADHAAR (70% of (a) above, bank account (80% of (a) above) and PAN (wherever applicable).

(c) UAN activation (60% of (a) above).

Note:

  1. The incentive, by way of refund, shall be payable at the end of every quarter starting from quarter ending March, 2016, as per the procedure prescribed by the Central Provident Fund Commissioner. The circular does not detail the method for claiming the refund. We presume the PF Department will be notifying the method by way of another communication.
  2. The establishments, in order to be eligible for Incentive Refund Scheme A or B, should have fulfilled the criteria in each month of a quarter.
  3. The incentive schemes shall be in operation for one year with effect from 1-Jan-2016 to 31-Dec-2016 (i.e. for the quarters beginning Jan-2016, Apr-2016, Jul-2016, and Oct-2016).

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  1. Venkatesh April 12, 2016

    I am impressed, its useful to all people thanks for this sharing for us and its interesting article, i got best information and best service from your blog, i am very glad to wish and sure its very helps.

    reply

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