Retirement fund body EPFO is planning to open a subscription facility to members who exited the scheme, says a media report. Under the plan, subscriptions can be resumed with contributions as low as Rs 500 a month. Those who lost jobs or moved from formal to informal sector can be the beneficiaries.
The Economic Times, quoting a government official, reported that EPFO is finalising a model that will allow individuals, who were EPFO members earlier, to join back with a minimum monthly contribution of Rs 500 or 12% of their monthly income.
The official is quoted as saying that EPFO is assessing the impact of this plan on pension (EPS), provident fund (EPF) and the employees deposit-linked insurance scheme of EPFO.
According to the EPFO estimates, about 4.8 million people exited during 2018-20. If the proposal goes through, it could be a major relief for millions of workers, the report said. The EPFO keeps the database of all exited members with universal account numbers which are Aadhaar-linked. It plans to use this to bring them back into its fold.
The Economic Times further noted that the Social Security Code 2020 provides for addition of new schemes under EPFO. The plan could be rolled out with the implementation of codes by the next fiscal, it added.
EPFO deposits are a social security cover. The retirement corpus under EPFO offers fixed returns at a higher rate than most other deposit schemes. It gives the benefits of pension, PF and insurance. EPFO has 69 million members and 7.1 million pensioners.
The net EPFO subscriber additions witnessed a growing trend in the April-August period which was marked by the devastating second wave of the Covid-19 pandemic. According to the payroll data of Employees Provident Fund Organisation (EPFO), 14.81 lakh net subscribers were added in August this year.