K Chandramouli, commissioner, Employees Provident Fund, tells Business Standard's Sreelatha Menon that expansion of the fund will make it sustainable.
There are plans to make the EPF include companies with less than 20 employees. Do you think you can handle the burden?
It is true that we will have to expand in one shot. But this matter is still under discussion.
The totalisation agreement with the US is stuck due to our poor social security coverage. Don't you think this can help?
It is a reality that the more you cover the better it is. But one has to see if one will be able to manage the numbers.
Will that double the number of subscribers from the 40 million at present?
Not necessarily. But we have to prepare ourselves. Also, companies with less than 20 workers have to agree to this.
What has been the progress on efforts to reform the Employees Pension Scheme (EPS)?
The Parliamentary Standing Committee report on the scheme is awaited.
The report seeks a separate workers' bank. Do you think it's feasible?
We haven't got the report. As for a workers' bank, it's an idea that has to be discussed for a decision to follow. I feel it will require different infrastructure and cannot be run with the resources of the EPF.
A reform of the pension scheme has to follow the premise that the pension amounts will depend on how much the emloyees have saved. Not much can be done to change that.
How do you propose to fix the hole in the EPF which has been reported to be about Rs 25,000 crore (Rs 250 billion)?
This was the finding of an actuarial report. The gap is still there and will take time to reduce as liabilities increase with more and more people falling in the pension net. The only way out is to grow. We have to keep growing to ensure that we cover people who are not paying into the fund. The present size of the gap between receipts and liabilities will be known only in March.
What are your plans to modernise the EPF so that one can access his account statement online?
We are computerising the EPF and we will do it in an implementable manner.
The EPF is still stuck in single-entry accounting while the rest of the world has moved to a double-entry system. Do you plan to change this?
When we computerise, we will sort this out.
Have you found the deposits of the alleged fake employees of Satyam?
No, we are looking at Satyam's deposits in Hyderabad according to the instructions from the Ministry of Corporate Affairs.
Are there any figures available on the number of Satyam subscribers?
Not immediately, as their offices are scattered all over.
Now, you have private fund managers. How do you propose to watch them?
We are watching them. We have an investment monitoring cell. It is the first time we are handling so many managers. But so far, the feedback has been good. They are entrusted only with a quarter of the fund. It is too early to say anything on them now. Basically, our architecture is such that the funds are safe.
How do you propose to catch the defaulters before they vanish?
I have issued instructions on this. The current demand should be met and at the same time the collection should be optimised of the arrears or the money pending from defaulters over the past 50 years. Under the EPF Act, we can't write off anything, so huge amounts pending from decades continue to be counted as arrears. There is also the issue of unclaimed funds.
Especially from poor subscribers who many be too ignorant to claim their money. The basic thrust will be to provide subscriber satisfaction. And there will be programmes to spread awareness among the poor.
Do you think you will use smart cards to link them all?
We have spent five years pursuing the card but it is nowhere near happening.
Can't the smart card of the national health insurance programme help
Let's see. If it works, we will latch on to it.
What has been your priority after joining?
I have given directions to get all the accounts cleaned up. This includes everything that is pending. This is important, though it is dull and boring. For if you put something in garbage, it also become garbage.
Why can't the EPF come up with a fund like the Employee State Insurance Corporation fund that will sheild the beneficiary when he is jobless?
The EPF can never do that. The objectives of the ESI and the EPF are different. And while the EPF caters to an individual, the ESI is a service for the payees. The EPF is a lifelong continuous process while the ESI is a service, say a health service, or an unemployment benefit. The EPF is there after the beneficiary retires and even after he dies.