Strategy to Reduce Inoperative Accounts EPFONo.: WSU/Inoperative Accounts/32736Date: 12thJan. 2015To,All Regional P.F. CommissionerIn-Charge of the ROs/SROs.Sub: Strategy to Reduce Inoperative Accounts by Identification and Refund of balance to the beneficiariesSir,It was mentioned at the highest level on the occasion of Shramyev Jayate held on 16thOctober 2014 that the amount of accumulation pertaining to beneficiaries which have become inoperative shall be returned to the rightful persons. The task of EPFO is to secure the financial benefits particularly in old age to persons joining the Scheme. In its fiduciary capacity it is responsibility of EPFO to refund the money to the beneficiaries for and on behalf of whom the money has been collected.2. In absence of availability of address of the beneficiary, the task though may be onerous has to be performed in time bound manner with active help and support of employers.3. The inoperative accounts are presently being settled as on date as per the existing process elaborated in circular No. WSU/Inoperative Accounts/6184 dated 28.07.2014. The process in respect of application made by the account holder in its own volition shall remain identical. For ready reference, copy of the Circular is enclosed.4. The issue of inoperative account has been discussed in a series of meeting held by CPFC. Every RO has been instructed to organize camp to ensure that money goes to the rightful claimant. Copy of the Email dated 18.08.2014 addressed to each RPFC/OIC is enclosed for ready reference.5. It has been observed that despite the express instructions, the progress in the area of reduction in inoperative account is not adequate. A concerted effort in this matter is needed. The following needs to be done immediately:- Identification of inoperative accounts. Reconciliation of same from the existing records to confirm the exact amount due to the beneficiary. Ascertaining UAN of current employment of the beneficiary in case the beneficiary is currently under employment and has a UAN. Transferring the amount from inoperative account to the current account by linking the UAN. Ascertaining the present address of the beneficiary with help of employer in case employee is not currently working. Getting the amount standing in the account refunded to the identified beneficiary.6. It has been observed that there is a large number of accounts which are presently inoperative wherein the final settlement through withdrawal has already been affected. However, subsequent to the withdrawal, an amount has been received in these accounts due to remittance of dues by the employer; collection of additional amount consequent to assessment under 7 A; and collection of the dues so assessed. The amount might also come due to transfer of an amount in the account from other offices. Amount might have also due to calculation and credit of interest subsequent to withdrawal particularly if the settlement had taken place prior to 2007 as per the then Scheme provisions.7. The Manual of Accounting Procedure at para No. 10.11.2 provides the following:-In case of defaulting establishments. the claim should be settled to the extent the amount standing to the credit of the member, balance as and when realized from the defaulting establishment should be released with interest as admissible under Para 60 of the EPF Scheme,1952.To this category of withdrawal process, all the cases where subsequent collection has been made through the process of assessment under 7A and collection of additional amount so assessed should also be included. Similarly, all the cases where withdrawal has already been made but subsequent credit due to transfer in or calculation of interest has been affected should also be included in this category. Interest to these additional amount of credit should be madeonly as per the existing provisions in paragraph No. 72(6) read along with paragraph 60(6) of the EPF Scheme, 1952.8. The address and the bank account number of such inoperative account is likely to be available in the system as these informations are stored in the database at the time of settlement of first claim of withdrawal.9. The process of this settlement does not require any application to be made by the beneficiary.10. However, in order to ensure that no wrong amount is credited to the account of the beneficiary who has settled his account through settlement at first instance, the following process over and above the existing process of settlement of claim is prescribed i) RPFC/OIC will get a list of all such cases prepared through the database.ii) The SSA of the Account Group will individually check that these inoperative accounts have earlier been settled.iii) The SSA will also note on the list the reason for credit in the account subsequent to settlement which will also be counter verified by AO in each case in order to satisfy that the inoperative account pertains to the category mentioned in para 6 of this instruction.iv) In all such cases, where subsequent credit in the settled account has been affected through any of the Appendix-E entry, it will be verified in 100% of cases by APFC.v) It will be responsibility of the AO to put up the list of cases before APFC wherein the subsequent credit has been affected in Appendix-E.vi) A letter will be dispatched to the last known address of the beneficiary to ascertain the following:-a)Whether the beneficiary still resides at the address available with EPFO.b) Whether the beneficiarv is also currently under employment and is part of EPF Scheme, 1952 and has been allotted a UAN.c) The correct and current bank account details of the beneficiary.d) Aadhar of the beneficiary. Initially considering the cost of the postage, letter will be sent only in cases having residual balance of Rs. 2000/- and above by ORDINARY POST. The format of the letter will be intimated by 16th January 2014 by that time the RPF(;/OlC must ensure Initiation and completion of process mentioned from clause (i) to clause (v) of this paragraph.vii) If the beneficiary is also currently under employment and is a member of EPF Scheme and therefore, has a UAN, he will be advised to activate his UAN so that a proper linking of the old inoperative account is made with the existing current account of the beneftclarv.viii) If the person exists at the given address and confirms that he has same bank account to which initial withdrawal was credited, the amount shall be transferred to his account. The process of settlement will be identical to the modalities prescribed vide circular No. WSU/Inoperative Accounts/6184 date 28.07.2014 with only difference that no claim form is required to be submitted by the beneficiary.11. Each RPFC/ OIC after having generated a list of such cases of inoperative account as mentioned in para (i) will also send report to FA&CAO indicating the number of cases pertaining to this category along with the amount which is currently being categorised as inoperative in following format:-Sl. No.CategoryNumber of AccountsAmount

Upto Rs. 500

501 to 1000

1001-2000

2001-5000

Above 5000

Total

12. Utmost importance and priority must be given to this task. The Progress in this area will monitored on periodical basis.Yours faithfullyEncl: As above (Sanjay Kumar)FA&CAStrategy to Reduce Inoperative Accounts EPFONo.: WSU/Inoperative Accounts/32736Date: 12thJan. 2015To,All Regional P.F. CommissionerIn-Charge of the ROs/SROs.Sub: Strategy to Reduce Inoperative Accounts by Identification and Refund of balance to the beneficiariesSir,It was mentioned at the highest level on the occasion of Shramyev Jayate held on 16thOctober 2014 that the amount of accumulation pertaining to beneficiaries which have become inoperative shall be returned to the rightful persons. The task of EPFO is to secure the financial benefits particularly in old age to persons joining the Scheme. In its fiduciary capacity it is responsibility of EPFO to refund the money to the beneficiaries for and on behalf of whom the money has been collected.2. In absence of availability of address of the beneficiary, the task though may be onerous has to be performed in time bound manner with active help and support of employers.3. The inoperative accounts are presently being settled as on date as per the existing process elaborated in circular No. WSU/Inoperative Accounts/6184 dated 28.07.2014. The process in respect of application made by the account holder in its own volition shall remain identical. For ready reference, copy of the Circular is enclosed.4. The issue of inoperative account has been discussed in a series of meeting held by CPFC. Every RO has been instructed to organize camp to ensure that money goes to the rightful claimant. Copy of the Email dated 18.08.2014 addressed to each RPFC/OIC is enclosed for ready reference.5. It has been observed that despite the express instructions, the progress in the area of reduction in inoperative account is not adequate. A concerted effort in this matter is needed. The following needs to be done immediately:- Identification of inoperative accounts. Reconciliation of same from the existing records to confirm the exact amount due to the beneficiary. Ascertaining UAN of current employment of the beneficiary in case the beneficiary is currently under employment and has a UAN. Transferring the amount from inoperative account to the current account by linking the UAN. Ascertaining the present address of the beneficiary with help of employer in case employee is not currently working. Getting the amount standing in the account refunded to the identified beneficiary.6. It has been observed that there is a large number of accounts which are presently inoperative wherein the final settlement through withdrawal has already been affected. However, subsequent to the withdrawal, an amount has been received in these accounts due to remittance of dues by the employer; collection of additional amount consequent to assessment under 7 A; and collection of the dues so assessed. The amount might also come due to transfer of an amount in the account from other offices. Amount might have also due to calculation and credit of interest subsequent to withdrawal particularly if the settlement had taken place prior to 2007 as per the then Scheme provisions.7. The Manual of Accounting Procedure at para No. 10.11.2 provides the following:-In case of defaulting establishments. the claim should be settled to the extent the amount standing to the credit of the member, balance as and when realized from the defaulting establishment should be released with interest as admissible under Para 60 of the EPF Scheme,1952.To this category of withdrawal process, all the cases where subsequent collection has been made through the process of assessment under 7A and collection of additional amount so assessed should also be included. Similarly, all the cases where withdrawal has already been made but subsequent credit due to transfer in or calculation of interest has been affected should also be included in this category. Interest to these additional amount of credit should be madeonly as per the existing provisions in paragraph No. 72(6) read along with paragraph 60(6) of the EPF Scheme, 1952.8. The address and the bank account number of such inoperative account is likely to be available in the system as these informations are stored in the database at the time of settlement of first claim of withdrawal.9. The process of this settlement does not require any application to be made by the beneficiary.10. However, in order to ensure that no wrong amount is credited to the account of the beneficiary who has settled his account through settlement at first instance, the following process over and above the existing process of settlement of claim is prescribed i) RPFC/OIC will get a list of all such cases prepared through the database.ii) The SSA of the Account Group will individually check that these inoperative accounts have earlier been settled.iii) The SSA will also note on the list the reason for credit in the account subsequent to settlement which will also be counter verified by AO in each case in order to satisfy that the inoperative account pertains to the category mentioned in para 6 of this instruction.iv) In all such cases, where subsequent credit in the settled account has been affected through any of the Appendix-E entry, it will be verified in 100% of cases by APFC.v) It will be responsibility of the AO to put up the list of cases before APFC wherein the subsequent credit has been affected in Appendix-E.vi) A letter will be dispatched to the last known address of the beneficiary to ascertain the following:-a)Whether the beneficiary still resides at the address available with EPFO.b) Whether the beneficiarv is also currently under employment and is part of EPF Scheme, 1952 and has been allotted a UAN.c) The correct and current bank account details of the beneficiary.d) Aadhar of the beneficiary. Initially considering the cost of the postage, letter will be sent only in cases having residual balance of Rs. 2000/- and above by ORDINARY POST. The format of the letter will be intimated by 16th January 2014 by that time the RPF(;/OlC must ensure Initiation and completion of process mentioned from clause (i) to clause (v) of this paragraph.vii) If the beneficiary is also currently under employment and is a member of EPF Scheme and therefore, has a UAN, he will be advised to activate his UAN so that a proper linking of the old inoperative account is made with the existing current account of the beneftclarv.viii) If the person exists at the given address and confirms that he has same bank account to which initial withdrawal was credited, the amount shall be transferred to his account. The process of settlement will be identical to the modalities prescribed vide circular No. WSU/Inoperative Accounts/6184 date 28.07.2014 with only difference that no claim form is required to be submitted by the beneficiary.11. Each RPFC/ OIC after having generated a list of such cases of inoperative account as mentioned in para (i) will also send report to FA&CAO indicating the number of cases pertaining to this category along with the amount which is currently being categorised as inoperative in following format:-Sl. No.CategoryNumber of AccountsAmount

Upto Rs. 500

501 to 1000

1001-2000

2001-5000

Above 5000

Total

12. Utmost importance and priority must be given to this task. The Progress in this area will monitored on periodical basis.Yours faithfullyEncl: As above (Sanjay Kumar)FA&CAStrategy to Reduce Inoperative Accounts EPFONo.: WSU/Inoperative Accounts/32736Date: 12thJan. 2015To,All Regional P.F. CommissionerIn-Charge of the ROs/SROs.Sub: Strategy to Reduce Inoperative Accounts by Identification and Refund of balance to the beneficiariesSir,It was mentioned at the highest level on the occasion of Shramyev Jayate held on 16thOctober 2014 that the amount of accumulation pertaining to beneficiaries which have become inoperative shall be returned to the rightful persons. The task of EPFO is to secure the financial benefits particularly in old age to persons joining the Scheme. In its fiduciary capacity it is responsibility of EPFO to refund the money to the beneficiaries for and on behalf of whom the money has been collected.2. In absence of availability of address of the beneficiary, the task though may be onerous has to be performed in time bound manner with active help and support of employers.3. The inoperative accounts are presently being settled as on date as per the existing process elaborated in circular No. WSU/Inoperative Accounts/6184 dated 28.07.2014. The process in respect of application made by the account holder in its own volition shall remain identical. For ready reference, copy of the Circular is enclosed.4. The issue of inoperative account has been discussed in a series of meeting held by CPFC. Every RO has been instructed to organize camp to ensure that money goes to the rightful claimant. Copy of the Email dated 18.08.2014 addressed to each RPFC/OIC is enclosed for ready reference.5. It has been observed that despite the express instructions, the progress in the area of reduction in inoperative account is not adequate. A concerted effort in this matter is needed. The following needs to be done immediately:- Identification of inoperative accounts. Reconciliation of same from the existing records to confirm the exact amount due to the beneficiary. Ascertaining UAN of current employment of the beneficiary in case the beneficiary is currently under employment and has a UAN. Transferring the amount from inoperative account to the current account by linking the UAN. Ascertaining the present address of the beneficiary with help of employer in case employee is not currently working. Getting the amount standing in the account refunded to the identified beneficiary.6. It has been observed that there is a large number of accounts which are presently inoperative wherein the final settlement through withdrawal has already been affected. However, subsequent to the withdrawal, an amount has been received in these accounts due to remittance of dues by the employer; collection of additional amount consequent to assessment under 7 A; and collection of the dues so assessed. The amount might also come due to transfer of an amount in the account from other offices. Amount might have also due to calculation and credit of interest subsequent to withdrawal particularly if the settlement had taken place prior to 2007 as per the then Scheme provisions.7. The Manual of Accounting Procedure at para No. 10.11.2 provides the following:-In case of defaulting establishments. the claim should be settled to the extent the amount standing to the credit of the member, balance as and when realized from the defaulting establishment should be released with interest as admissible under Para 60 of the EPF Scheme,1952.To this category of withdrawal process, all the cases where subsequent collection has been made through the process of assessment under 7A and collection of additional amount so assessed should also be included. Similarly, all the cases where withdrawal has already been made but subsequent credit due to transfer in or calculation of interest has been affected should also be included in this category. Interest to these additional amount of credit should be madeonly as per the existing provisions in paragraph No. 72(6) read along with paragraph 60(6) of the EPF Scheme, 1952.8. The address and the bank account number of such inoperative account is likely to be available in the system as these informations are stored in the database at the time of settlement of first claim of withdrawal.9. The process of this settlement does not require any application to be made by the beneficiary.10. However, in order to ensure that no wrong amount is credited to the account of the beneficiary who has settled his account through settlement at first instance, the following process over and above the existing process of settlement of claim is prescribed i) RPFC/OIC will get a list of all such cases prepared through the database.ii) The SSA of the Account Group will individually check that these inoperative accounts have earlier been settled.iii) The SSA will also note on the list the reason for credit in the account subsequent to settlement which will also be counter verified by AO in each case in order to satisfy that the inoperative account pertains to the category mentioned in para 6 of this instruction.iv) In all such cases, where subsequent credit in the settled account has been affected through any of the Appendix-E entry, it will be verified in 100% of cases by APFC.v) It will be responsibility of the AO to put up the list of cases before APFC wherein the subsequent credit has been affected in Appendix-E.vi) A letter will be dispatched to the last known address of the beneficiary to ascertain the following:-a)Whether the beneficiary still resides at the address available with EPFO.b) Whether the beneficiarv is also currently under employment and is part of EPF Scheme, 1952 and has been allotted a UAN.c) The correct and current bank account details of the beneficiary.d) Aadhar of the beneficiary. Initially considering the cost of the postage, letter will be sent only in cases having residual balance of Rs. 2000/- and above by ORDINARY POST. The format of the letter will be intimated by 16th January 2014 by that time the RPF(;/OlC must ensure Initiation and completion of process mentioned from clause (i) to clause (v) of this paragraph.vii) If the beneficiary is also currently under employment and is a member of EPF Scheme and therefore, has a UAN, he will be advised to activate his UAN so that a proper linking of the old inoperative account is made with the existing current account of the beneftclarv.viii) If the person exists at the given address and confirms that he has same bank account to which initial withdrawal was credited, the amount shall be transferred to his account. The process of settlement will be identical to the modalities prescribed vide circular No. WSU/Inoperative Accounts/6184 date 28.07.2014 with only difference that no claim form is required to be submitted by the beneficiary.11. Each RPFC/ OIC after having generated a list of such cases of inoperative account as mentioned in para (i) will also send report to FA&CAO indicating the number of cases pertaining to this category along with the amount which is currently being categorised as inoperative in following format:-Sl. No.CategoryNumber of AccountsAmount

Upto Rs. 500

501 to 1000

1001-2000

2001-5000

Above 5000

Total

12. Utmost importance and priority must be given to this task. The Progress in this area will monitored on periodical basis.Yours faithfullyEncl: As above (Sanjay Kumar)FA&CAStrategy to Reduce Inoperative Accounts EPFONo.: WSU/Inoperative Accounts/32736Date: 12thJan. 2015To,All Regional P.F. CommissionerIn-Charge of the ROs/SROs.Sub: Strategy to Reduce Inoperative Accounts by Identification and Refund of balance to the beneficiariesSir,It was mentioned at the highest level on the occasion of Shramyev Jayate held on 16thOctober 2014 that the amount of accumulation pertaining to beneficiaries which have become inoperative shall be returned to the rightful persons. The task of EPFO is to secure the financial benefits particularly in old age to persons joining the Scheme. In its fiduciary capacity it is responsibility of EPFO to refund the money to the beneficiaries for and on behalf of whom the money has been collected.2. In absence of availability of address of the beneficiary, the task though may be onerous has to be performed in time bound manner with active help and support of employers.3. The inoperative accounts are presently being settled as on date as per the existing process elaborated in circular No. WSU/Inoperative Accounts/6184 dated 28.07.2014. The process in respect of application made by the account holder in its own volition shall remain identical. For ready reference, copy of the Circular is enclosed.4. The issue of inoperative account has been discussed in a series of meeting held by CPFC. Every RO has been instructed to organize camp to ensure that money goes to the rightful claimant. Copy of the Email dated 18.08.2014 addressed to each RPFC/OIC is enclosed for ready reference.5. It has been observed that despite the express instructions, the progress in the area of reduction in inoperative account is not adequate. A concerted effort in this matter is needed. The following needs to be done immediately:- Identification of inoperative accounts. Reconciliation of same from the existing records to confirm the exact amount due to the beneficiary. Ascertaining UAN of current employment of the beneficiary in case the beneficiary is currently under employment and has a UAN. Transferring the amount from inoperative account to the current account by linking the UAN. Ascertaining the present address of the beneficiary with help of employer in case employee is not currently working. Getting the amount standing in the account refunded to the identified beneficiary.6. It has been observed that there is a large number of accounts which are presently inoperative wherein the final settlement through withdrawal has already been affected. However, subsequent to the withdrawal, an amount has been received in these accounts due to remittance of dues by the employer; collection of additional amount consequent to assessment under 7 A; and collection of the dues so assessed. The amount might also come due to transfer of an amount in the account from other offices. Amount might have also due to calculation and credit of interest subsequent to withdrawal particularly if the settlement had taken place prior to 2007 as per the then Scheme provisions.7. The Manual of Accounting Procedure at para No. 10.11.2 provides the following:-In case of defaulting establishments. the claim should be settled to the extent the amount standing to the credit of the member, balance as and when realized from the defaulting establishment should be released with interest as admissible under Para 60 of the EPF Scheme,1952.To this category of withdrawal process, all the cases where subsequent collection has been made through the process of assessment under 7A and collection of additional amount so assessed should also be included. Similarly, all the cases where withdrawal has already been made but subsequent credit due to transfer in or calculation of interest has been affected should also be included in this category. Interest to these additional amount of credit should be madeonly as per the existing provisions in paragraph No. 72(6) read along with paragraph 60(6) of the EPF Scheme, 1952.8. The address and the bank account number of such inoperative account is likely to be available in the system as these informations are stored in the database at the time of settlement of first claim of withdrawal.9. The process of this settlement does not require any application to be made by the beneficiary.10. However, in order to ensure that no wrong amount is credited to the account of the beneficiary who has settled his account through settlement at first instance, the following process over and above the existing process of settlement of claim is prescribed i) RPFC/OIC will get a list of all such cases prepared through the database.ii) The SSA of the Account Group will individually check that these inoperative accounts have earlier been settled.iii) The SSA will also note on the list the reason for credit in the account subsequent to settlement which will also be counter verified by AO in each case in order to satisfy that the inoperative account pertains to the category mentioned in para 6 of this instruction.iv) In all such cases, where subsequent credit in the settled account has been affected through any of the Appendix-E entry, it will be verified in 100% of cases by APFC.v) It will be responsibility of the AO to put up the list of cases before APFC wherein the subsequent credit has been affected in Appendix-E.vi) A letter will be dispatched to the last known address of the beneficiary to ascertain the following:-a)Whether the beneficiary still resides at the address available with EPFO.b) Whether the beneficiarv is also currently under employment and is part of EPF Scheme, 1952 and has been allotted a UAN.c) The correct and current bank account details of the beneficiary.d) Aadhar of the beneficiary. Initially considering the cost of the postage, letter will be sent only in cases having residual balance of Rs. 2000/- and above by ORDINARY POST. The format of the letter will be intimated by 16th January 2014 by that time the RPF(;/OlC must ensure Initiation and completion of process mentioned from clause (i) to clause (v) of this paragraph.vii) If the beneficiary is also currently under employment and is a member of EPF Scheme and therefore, has a UAN, he will be advised to activate his UAN so that a proper linking of the old inoperative account is made with the existing current account of the beneftclarv.viii) If the person exists at the given address and confirms that he has same bank account to which initial withdrawal was credited, the amount shall be transferred to his account. The process of settlement will be identical to the modalities prescribed vide circular No. WSU/Inoperative Accounts/6184 date 28.07.2014 with only difference that no claim form is required to be submitted by the beneficiary.11. Each RPFC/ OIC after having generated a list of such cases of inoperative account as mentioned in para (i) will also send report to FA&CAO indicating the number of cases pertaining to this category along with the amount which is currently being categorised as inoperative in following format:-Sl. No.CategoryNumber of AccountsAmount

Upto Rs. 500

501 to 1000

1001-2000

2001-5000

Above 5000

Total

12. Utmost importance and priority must be given to this task. The Progress in this area will monitored on periodical basis.Yours faithfullyEncl: As above (Sanjay Kumar)FA&CAStrategy to Reduce Inoperative Accounts EPFONo.: WSU/Inoperative Accounts/32736Date: 12thJan. 2015To,All Regional P.F. CommissionerIn-Charge of the ROs/SROs.Sub: Strategy to Reduce Inoperative Accounts by Identification and Refund of balance to the beneficiariesSir,It was mentioned at the highest level on the occasion of Shramyev Jayate held on 16thOctober 2014 that the amount of accumulation pertaining to beneficiaries which have become inoperative shall be returned to the rightful persons. The task of EPFO is to secure the financial benefits particularly in old age to persons joining the Scheme. In its fiduciary capacity it is responsibility of EPFO to refund the money to the beneficiaries for and on behalf of whom the money has been collected.2. In absence of availability of address of the beneficiary, the task though may be onerous has to be performed in time bound manner with active help and support of employers.3. The inoperative accounts are presently being settled as on date as per the existing process elaborated in circular No. WSU/Inoperative Accounts/6184 dated 28.07.2014. The process in respect of application made by the account holder in its own volition shall remain identical. For ready reference, copy of the Circular is enclosed.4. The issue of inoperative account has been discussed in a series of meeting held by CPFC. Every RO has been instructed to organize camp to ensure that money goes to the rightful claimant. Copy of the Email dated 18.08.2014 addressed to each RPFC/OIC is enclosed for ready reference.5. It has been observed that despite the express instructions, the progress in the area of reduction in inoperative account is not adequate. A concerted effort in this matter is needed. The following needs to be done immediately:- Identification of inoperative accounts. Reconciliation of same from the existing records to confirm the exact amount due to the beneficiary. Ascertaining UAN of current employment of the beneficiary in case the beneficiary is currently under employment and has a UAN. Transferring the amount from inoperative account to the current account by linking the UAN. Ascertaining the present address of the beneficiary with help of employer in case employee is not currently working. Getting the amount standing in the account refunded to the identified beneficiary.6. It has been observed that there is a large number of accounts which are presently inoperative wherein the final settlement through withdrawal has already been affected. However, subsequent to the withdrawal, an amount has been received in these accounts due to remittance of dues by the employer; collection of additional amount consequent to assessment under 7 A; and collection of the dues so assessed. The amount might also come due to transfer of an amount in the account from other offices. Amount might have also due to calculation and credit of interest subsequent to withdrawal particularly if the settlement had taken place prior to 2007 as per the then Scheme provisions.7. The Manual of Accounting Procedure at para No. 10.11.2 provides the following:-In case of defaulting establishments. the claim should be settled to the extent the amount standing to the credit of the member, balance as and when realized from the defaulting establishment should be released with interest as admissible under Para 60 of the EPF Scheme,1952.To this category of withdrawal process, all the cases where subsequent collection has been made through the process of assessment under 7A and collection of additional amount so assessed should also be included. Similarly, all the cases where withdrawal has already been made but subsequent credit due to transfer in or calculation of interest has been affected should also be included in this category. Interest to these additional amount of credit should be madeonly as per the existing provisions in paragraph No. 72(6) read along with paragraph 60(6) of the EPF Scheme, 1952.8. The address and the bank account number of such inoperative account is likely to be available in the system as these informations are stored in the database at the time of settlement of first claim of withdrawal.9. The process of this settlement does not require any application to be made by the beneficiary.10. However, in order to ensure that no wrong amount is credited to the account of the beneficiary who has settled his account through settlement at first instance, the following process over and above the existing process of settlement of claim is prescribed i) RPFC/OIC will get a list of all such cases prepared through the database.ii) The SSA of the Account Group will individually check that these inoperative accounts have earlier been settled.iii) The SSA will also note on the list the reason for credit in the account subsequent to settlement which will also be counter verified by AO in each case in order to satisfy that the inoperative account pertains to the category mentioned in para 6 of this instruction.iv) In all such cases, where subsequent credit in the settled account has been affected through any of the Appendix-E entry, it will be verified in 100% of cases by APFC.v) It will be responsibility of the AO to put up the list of cases before APFC wherein the subsequent credit has been affected in Appendix-E.vi) A letter will be dispatched to the last known address of the beneficiary to ascertain the following:-a)Whether the beneficiary still resides at the address available with EPFO.b) Whether the beneficiarv is also currently under employment and is part of EPF Scheme, 1952 and has been allotted a UAN.c) The correct and current bank account details of the beneficiary.d) Aadhar of the beneficiary. Initially considering the cost of the postage, letter will be sent only in cases having residual balance of Rs. 2000/- and above by ORDINARY POST. The format of the letter will be intimated by 16th January 2014 by that time the RPF(;/OlC must ensure Initiation and completion of process mentioned from clause (i) to clause (v) of this paragraph.vii) If the beneficiary is also currently under employment and is a member of EPF Scheme and therefore, has a UAN, he will be advised to activate his UAN so that a proper linking of the old inoperative account is made with the existing current account of the beneftclarv.viii) If the person exists at the given address and confirms that he has same bank account to which initial withdrawal was credited, the amount shall be transferred to his account. The process of settlement will be identical to the modalities prescribed vide circular No. WSU/Inoperative Accounts/6184 date 28.07.2014 with only difference that no claim form is required to be submitted by the beneficiary.11. Each RPFC/ OIC after having generated a list of such cases of inoperative account as mentioned in para (i) will also send report to FA&CAO indicating the number of cases pertaining to this category along with the amount which is currently being categorised as inoperative in following format:-Sl. No.CategoryNumber of AccountsAmount

Upto Rs. 500

501 to 1000

1001-2000

2001-5000

Above 5000

Total

12. Utmost importance and priority must be given to this task. The Progress in this area will monitored on periodical basis.Yours faithfullyEncl: As above (Sanjay Kumar)FA&CA

ssue of notices to defaulting establishments EPFONo. C-III/Compliance-2001/Cir/E.V/31509Date: 07 Jan 2015To,All Regional PF Commissioners,In-Charge of Regional/ Sub-Regional Offices,Subject: Issue of notices to defaulting establishments on initiation of proceedingsunder Section 7A/14B of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 thorough email regardingSir,A facility for Online Registration of Establishments (OLRE) has been provided for the employers to get themselves registered under the Employees Provident Funds & Miscellaneous Provisions Act, 1952 (the Act) for Provident Fund code number.2. Establishments are now required to register themselves online for PF code number. While registering themselves the employees are required to fill up Form 5A regarding particulars of all the branches and departments, owners, occupiers, directors, partners, manager or any other person or persons who have the ultimate control over the affair of such factory or establishment in e-format. A provision has also been made in the Form 5A to register the e-mail ID of the establishment. It has also been instructed that the existing establishments are also required to fill up Form 5A online.3. As per the existing practice, whenever proceeding are initiated either under Section 7A of the Act for deciding applicability / assessment of dues against the defaulting establishments or Section 14B of the Act for levy of damages, notices are issued to the establishments. by post.4. Now, since the employers provided their e-mail id in Form 5A, it has been decided that in addition to notices issued by post, notices shall also be sent in the e-mail id of the establishment.5. This shall be strictly adhered to.(This issues with the approval of CPFC)Yours faithfully,

Provident Fund Membership Need Not Be CompulsoryWith Rs.26,496.61 crores unclaimed money and Rs.392927.29 lakh arrears to be recovered, the Employees Provident Fund Organisation has not properly managed over 7,95,827 establishments with 117813454 members. Unless it functions like an enlightened enterprise, it should not be vested with a right to confiscate the hard earned money of low paid employees.Over 500 employers have approached the ministry of labour to consider revamping of the laws governing salary payment and granting employees a choice as to how they want the payment of salaries. They have urged the government to take a re-look at the laws governing salary payment of low-wage employees by allowing them to choose how their salary is paid and contributions invested. Besides that, the employers should be allowed either to pay their contribution to the Employee Pension Scheme or an individual account of the beneficiary opened with the National pension Scheme.The Employees Provident Funds and Miscellaneous Provisions Act of 1952 (hereinafter referred to as EPF&MP Act) is a welfare scheme like most of the labour legislations. The Act applies in the first instance to factories engaged in any of scheduled industries in which twenty or more persons are employed. The Act is meant to make provisions for the future of a worker if he retires or for his dependents in case of his early death. Its purpose is also to inculcate the habit of saving something regularly.However, when the EPF&MP Act is seen holistically from the practical point of view, it appears that it has outlived its utility. The Employees Provident Fund Scheme has been in focus during the last many years, when the tide of globalization has started sweeping the world and in its wake the Berlin wall got collapsed, and the Soviet Union got disintegrated. In the present circumstances it has completely failed to serve the interest of employees particularly those who are in the lowest paid category when they feel the pinch when a major part of their meagre wages is deducted towards future payment. For instance, take the minimum wages on an average in different States @Rs.6,000 per month and an employee who gets such a low wages is required to contribute Rs.720, then it hits him hard even though in future he may get more money.In addition to above, a large number of employees, even though they have contributed for the fund for a short period, have not been able to withdraw their hard earned deductions since it is full of hassles and many objections are raised by the appropriate authorities. Sometimes their addresses were not found to be correct or their signatures do not tally or that the employer has not attested for withdrawal form. They have to run from pillar to post and ultimately they give up and such unclaimed money is being set on towards higher rate of interest which is only notional but not realistic. Take, for instance, the construction workers, particularly who come for a few days or months in order to help the workers for putting of lintel which requires a continuing process and they are paid daily wages and deductions for provident fund are made and after completing the job at different places, they migrate to their native place, situated in remote areas. They have hardly any information about deduction and contribution and, thus, they cannot make claim for their hard savings. Those who are in the lowest cadre are the worst sufferers and as such it has failed and the object is totally defeated. In ISDB Infrastructure (P) Ltd. vs. UOI, the Division Bench of Delhi High Court on 18.12.2014 observed We are informed that a sum of Rs.27,000 crore in lying unutilized (unclaimed). The EPFO had also stated that Rs.26,496.61 crore is kept in inoperative account as on 31.3.2013.The recovery process of the EPF department is not found to be effective since the arrears of contributions are multiplying. Over Rs.392927.29 lakhs are the arrears till 31.3.2014 yet to be recovered.The efficiency of the Employees Provident Fund Organisation can be illustrative that it has taken more than 13 years for enhancement the wage/salary cap for coverage of an employee from Rs.6,500 to Rs.15,000 per month. It has become a mismanaged a sick organization. It cannot manage 7,95,827 unexempted, 30,621 exempted establishments with membership 117813454 members (as on 31.3.2014).That is why, quite a large number of people are advocating for abolishing this Act itself. The social security arrangement may have been valid during the days of state-controlled economy when choices for savings were limited. That situation does not obtain in a market-driven, free economy which offers multiple choices for savings and easy access to personal loans. The government is requested to move away from the current benefits confiscation regime because it harms the people it is trying to protect. People do not have to depend on their provident fund for low interest loans (from their own savings) to build a house or meet other expenses; they can walk into a bank get a better deal. With sweeping changes in urban lifestyle, priorities have changed, too. It is doubtful whether workers in the organized sector would like to remain captives of a decrepit and outdated system which is no more than a relic of the socialistic. The beneficiaries of this Act are actually minuscule, who are in the organized sector. It would thus be appropriate that instead of confiscating the hard earned wages, the membership of the Scheme should be optional for the employees.

INSPECTION SCHEMES FOR PROVIDENT FUND & ESIINSPECTION SCHEMES FOR PROVIDENT FUNDS & ESIThe Ministry of Labour and Employment on 21st June, 2014 has issued INSPECTION SCHEMES of Employees Provident Fund and ESI with criteria of inspections i.e. mandatory inspections, optional inspections, methodology and general instructions which will curtail the frequent and irrelevant inspections by the concerned authorities. Following are the detailed notifications:[tabscollapsible=true selected=0 event=click position=top] [tab title=for PF]INSPECTION SCHEME OF EMPLOYEESPROVIDENT FUNDORGANIZATIONZ-20025/02/20 14-SS-1GOVERNMENT OF INDIA/BHARAT SARKAR MINISTRY OF LABOUR & EMPLOYMENT/SHRAM AUR ROZGAR MANTRALAYA*****

Objective:The Inspection Scheme aims to achieve the objective of simplifying business regulations and bring in transparency and accountability in labour inspections. It envisages objective criteria for selection of units for inspection.Criteria of InspectionsMandatory inspections:-1. In the following cases, the inspections will be mandatory for all units:-i) All new coveragesii) All establishments registered on ECR portal, not marked as closed and not complying.iii) Establishments reported for closure2. EPFO would set up a Central Analysis and Intelligence Unit (CAIU) for collecting, analysing field level data for a transparent and accountable labour inspection system. The cases forwarded through Central Analysis & Intelligence Unit (CAIU) of EPFO will be based on data and evidence. EPFO will formulate an objective methodology for selection criteria of the cases by the CAIU keeping in view its priorities and the provisions of ILO C-81.Optional inspections:-3. In following cases, the inspections would be generated through computer using pre-decided number tables taking into account the following factors:-1) Drop in remittance/membership as compared to last quarter Remittance drop in excess of Rs.10000/- and 15% (weightage of 1:1 )[40%] Membership drop in excess of 50 members and 15% (weightage of 1:1)[40%] All other Units [20%] Normally not to be repeated in the same year as far as possible.4.Methodology:1. Employers to feed master data and periodical returns.2. Inspectors to feed detailed inspection report.3. Inspectors to feed accident returns.4. Computer programme to be provided by NIC taking into account the criteria.5. Computerized generation of inspection programme and communication to the inspecting staff keeping in view the confidentiality aspects.5.General Instructions:1. The inspecting officer has to maintain registers of the establishments.2. He has to record the statement of workers present at the time of inspection.3. In case of contradiction in the statements of employers, worker and entries in the record, the inspecting officer will seize the relevant records.4. Inspection report should always be prepared on the work-spot by the inspecting officer himself and handover to the employers representative.5. The inspection should be carried out during the normal working hours as far as possible.6. The inspection report is being simplified and under review/revision.7. The inspection report should be uploaded within 3 days by the inspector.8. In case of violations by the inspecting staff, entries are recorded in APAR.(Ajay Malik)Under Secretary to the Govt of India New Delhi,Dated the 21st June, 2014[/tab] [tabtitle=for ESI]INSPECTION SCHEME FOREMPLOYEES STATE INSURANCECORPORATIONZ -20025/02/2014-SS-1GOVERNMENT OF INDIA/BHARAT SARKAR MINISTRY OF LABOUR & EMPLOYMENT / SHRAM AUR ROZGAR MANTRALAYA ****Objective:The Inspection Scheme aims to achieve the objective of simplifying business regulations and bring in transparency and accountability in labour inspections. It envisages objective criteria for selection of units for inspection.Criteria of InspectionsMandatory inspections:-1. In the following cases, the inspections will be mandatory for all units:-i) All new covered/registered unitsii) Units which have been defaulters for six monthsiii) Units for which closure request has been receivediv) Units where no inspection was carried out in last 3 years (as ESIC has time bar of 5 years for claiming dues)2. ESIC would set up a Central Analysis and Intelligence Unit (CAIU) for collecting and analysing field level data for a transparent and accountable labour inspection system. The cases forwarded through Central Analysis & Intelligence Unit (CAIU) of ESIC will be based on data and evidence. ESIC will formulate an objective methodology for selection criteria of the cases by the CAIU keeping in view its priorities and the provisions of ILO C-81.Optional inspections:3. In following cases, the inspections would be generated through computer using pre-decided number tables taking into account the following factors:-1) Drop in contribution by 30% and above compared to previous contribution period (over a period of six months)[30%] 2) Drop in number of covered employees by 30% and above compared to previous contribution period (over a period of six months)[30%] 3) Security/manpower agencies employing more than 250 employees[30%] 4) Any other not falling in above categories [10%]4Methodology:1. Employers to feed master data and periodical returns.2. Inspectors to feed detailed inspection report.3. Inspectors to feed accident returns.4. Computer programme to be provided by NIC taking into account the criteria.5. Computerized generation of inspection programme and communication to the inspecting staff keeping in view the confidentiality aspects.5General Instructions:1. The inspecting officer has to maintain registers of the establishments.2. He has to record the statement of workers present at the time of inspection.3. In case of contradiction in the statements of employers, worker and entries in the record, the inspecting officer will seize the relevant records.4. Inspection report should always be prepared on the work-spot by the inspecting officer himself and handover to the employers representative.5. The inspection should be carried out during the normal working hours.6. The inspection report is being simplified and under review/revision.7. The inspection report should be uploaded within 3 days by the inspector.8. In case of violations by the inspecting staff, entries are recorded in APAR.(Ajay Malik)Under Secretary to the Govt of India New Delhi,Dated the 21st June, 2014[/tab] [/tabs]