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Coal miners log into PF and pension accounts

Coal miners and pensioners were at the mercy of babus and the middlemen to get information about their PF and final pension settlements. Post implementation of SAP ERP by CMPF they do it themselves and have online access to their accounts says Akhtar Pasha

Over six lakhs members (coal miners) and more than 2.5 lakhs pensioners of Coal Mines Provident Fund Organization (CMPF) employed in 10 private sector companies (their employers) are happy after CMPF’s implementation of mySAP ERP 5.0. Both members and pensioners are no longer at the mercy of lethargic babus (employers) who delay endlessly to settle their dues (be it their pension post retirement or provident fund, PF) nor do they have to bribe middlemen to withdraw PF money from their own accounts. One man who dreamt of streamlining the settlement of pension and PF money when a member retires is Balakrushna Panda, Commissioner, CMPF. Thanks to his efforts, members and pensioners are able to do so themselves and have up to date information about their PF and their pensions are settled on the dot.

Panda recalled, “When I took charge there were 45,000 pensions cases that were pending. There was no transparency in the organization. The entire system was in jeopardy. Getting basic information used to takes ages.”

Established in 1948, CMPF is an autonomous body under the Ministry of Coal, Government of India, headquartered in Dhanbad and consists of 13 regional offices in 17 locations primarily in coal bearing areas. CMPF has the distinction of having a computerized and networked centralized processing Social Security Organization in the country. EPFO has yet to achieve this although it started six years back.

Manual processes posed greater challenge

“We had mostly a paper-based system in place for all our business process. For example information pertaining to coal workers used to reach CMPF from different offices. Members used to fill in and submit forms to their employer and they, in turn, raised the claim forms and submitted the same to the CMPF. These papers moved from table to table. In the event of any clarification or mistakes, it had to go back into the loop. Panda said, “The entire process in pension settlement used to take one to two years as it had to go through a series of correspondence going back and forth and let us not forget the middlemen waiting to exploit members. Additionally the amount sanctioned some times did not tally with the actual. Banks used to play spoilsport stating that they had not received any information about PF or pension or gave excuses such as checks had not come to them from CMPF.

“Even updation of a member’s personal data to include details of family members, nominations and back accounts used to take three months. It was a tedious task. This was because of lack of awareness among members and the fact that we did not have proper systems to track it.”

Even monthly contributions to PF were not known by members for a duration of 4-5 years until they retired or during occasions such as marriage in the family when they withdrew part of their PF money. Additionally during transfer of a member from one location to another, a lot of correspondence used to follow which the regional commissioners, joint commissioners and commissioner monitored. Many a times recalled Panda, “Some of these commissioners were just not interested in clearing all the paper work. The entire paper work used to take three months to a year to complete. Even basic information about PF account balance used to take 6-7 months time.”

“Worst of all, there were middlemen who paralyzed the entire system,” said Panda. He explained that there was an instance wherein a member thought that he had only Rs 3 lakhs in his PF account and bribed middlemen for as high as Rs 50,000 who in turn assured him that they would get him in excess of Rs 5 lakhs from his PF account. However the fact was that that member had more than Rs 5 lakhs in his PF account. It was just that the member was unaware of his latest PF account information. Had the latest PF account information available; the member would not have bribed the middlemen to extract his own money. There were many other cases of the same nature involving middlemen.

Making a choice

Panda said, “We wanted to implement a solution that would help us reduce the turnaround time in settling outstanding PF amounts of our members and improve our standards of service delivered to them and their family members. SAP being a proven leader in the industry became an obvious choice.” CPMPF evaluated SAP, Oracle and Microsoft’s ERP solution in August 2005. A formal deal was signed with SAP in December 2005. To suit its requirement, CMPF had to customize the ERP solution to make certain changes to include retirement age, percentage of PF and pension and to accommodate several PF and Pension Act of Government of India. mySAP R/3 5.0 ERP went live at the CMPF headquarters in Dhanbad, 3 regional offices in Dhanbad, Deoghar and Kolkata on 31st August 2007. Later in Nov 2007 SAP ERP was rolled out in other region—Jabalpur, Hyderabad, Nagpur, Bilaspur and Assansole. CMPF chose the following modules for deployment—FACD (Financial Accounting Collection and Disbursement), Payroll, XI (Exchange Infrastructure) and FICO. Panda said, “To avoid third party miscommunication that could have affected the end result of the ERP implementation we asked SAP Consulting to undertake the implementation that we called NIDHI—New Initiative for Digitizing and Handling of Informationaimed at providing an end-to-end solution on a single integrated platform for the management of PF, advances and pension settlement, all integrated with centralized financial accounting.

Total transparency

Deploying SAP ERP has brought in complete transparency in the business processes of employers and CMPF. Panda said, “Now anyone can view their own PF account information. They need not travel to the local office and ask their employer about their account information. They can log into the portal we have created and get the required details online.” Further all the paper-based correspondence involved in transfer cases has been done away with. This has eliminated the inefficiencies of regional offices at CMPF and employers and has reduced errors and mistakes that used to be seen. Paperwork is reduced and transfer cases are processed centrally.

Panda added that SAP ERP has further streamlined the life of members by integrating the ERP with an IVRS (Interactive Voice Response System) and mobile networks. Panda said, “We have a toll free number wherein any member (literate/illiterate) can access his PF account information in his local language through voice interaction. It supports seven regional languages. Additionally some members who are mobile (domestic and employed overseas) can also access the same information through a mobile phone.

Centralized online information

Retrieval of data is now online. The centralized databases have made it easier to track any details of members to the last stage individual level. For example, a commissioner can see the progress of claims forms lying at the employer end and the number of hours a member has worked in a week or month. The commissioner can task the employer for not clearing an employee’s dues, he can view the number of cases pending/cleared by employers, can identify problem areas and take appropriate decisions immediately. In case of any mistake, it can be tracked down to the individual responsible.

Panda said, “Currently we send pension instructions to the bank by e-mail to release pension to members on their retirement day and the settlement is done instantly.” Additionally our plan is to integrate the ERP with the employer so that any dues unpaid to the member result in an alert and CMPF enforces the settlement of dues. Since most coal companies are not ready, our plan is to make this happen in the next six months.

Panda has also plans to integrate banks with the ERP system so that settlement process can be further streamlined. Currently banks are wary because of the security reasons and he is hopeful to achieve it shortly.

akhtar.pasha@expressindia.com