Surge in Establishments Opting for EPFO Management Adds Rs. 1688.82 Crores to Provident Fund

New Delhi: Over the past two years, 27 establishments have surrendered their exemption status, resulting in the addition of approximately 30,000 employees and a sum of Rs. 1688.82 crores to the Employees’ Provident Fund Organisation (EPFO).

This trend reflects the growing preference among establishments to have EPFO directly manage their employees’ Provident Fund (PF), allowing these businesses to concentrate on their core activities. The shift is attributed to improved services provided by EPFO, including faster claim settlements, higher rates of return, robust monitoring, and streamlined engagement processes.

Under the Ministry of Labour and Employment, EPFO has implemented multiple measures in the past year to simplify compliance procedures for establishments exempted under the EPF Act. These steps have significantly enhanced the overall experience for both establishments and members.

In a bid to standardize procedures, EPFO has published comprehensive Standard Operating Procedures (SOPs) and manuals covering all relevant procedures for exempted establishments. Additionally, a new software and portal aimed at simplifying the process of surrendering exemptions is set to launch shortly, marking a significant move towards digitization.

Establishments seeking to manage the PF corpus of their employees must obtain an exemption under Section 17 of the EPF Act. This exemption allows them to operate their own PF Trusts without making statutory contributions to EPFO. However, these exempted establishments are legally required to provide benefits that are at least equivalent to those provided by EPFO to its subscribers and adhere to the notified conditions of exemption as outlined in the Act.

As of March 31, 2023, there are 1,002 exempted establishments managing a total corpus of Rs. 3,52,000 crores for 31,20,323 members.