Employees’ Provident Fund (EPF) to the National Pension System (NPS) transfer law:
The government is set to simplify the laws affecting employees through a new Code on Social Security 2019. A preliminary draft of the Code has been put in public domain till October 25 for comments and suggestions. The Code will amend and consolidate all laws relating to the social security of workers and the connected matters. The Code on Social Security 2019 will be introduced in the parliament as a Bill, and upon a passage in both Houses, it will become an Act and apply to the whole of India.
One of the interesting provisions mentioned in the draft code is to allow employees’ to switch from Employees’ Provident Fund Scheme to the National Pension System (NPS). In Section 18(1) of Chapter 3 titled ‘Employees Provident Fund’, the draft code says, “The Chief Executive Officer of the Board or any other officer authorized by him in this behalf may, upon receipt of an application, in such form as may be prescribed by the Central Government, and after conducting such inquiry as may be necessary, allow any employee or a class of employees to exercise the option to join the National Pension System.” This will be subject to two conditions:
- The application under this sub-section would be deemed to have been allowed form the date of submission of application if no order is passed within a period of sixty days from the date of its submission.
- Any person joining his first job may join the NPS without making any application under this sub-section. “Provided further that any person joining the first employment in an establishment to which this Chapter applies may join the National Pension System without making an application under this sub-section for allowing him for such joining,” it says
Section 18 (3) mentions that when an employee would join NPS, he would be deemed to have exited Employees’ Provident FundScheme, Pension Scheme and Insurance Scheme from the date of submission of the application for such joining.
Employees joining NPS will have the option to join back the Schemes framed under the Chapter. Also, the manner and method to switch back from NPS and the transfer of accumulation from the Nationa Pension to schemes frames under the Chapter will be prescribed by the Central Government.
Courtesy: Financial Express