More than Rs 27000 crores of EPF unclaimed, know how to claim yours
Employees contribute to Provident Fund for post retirement benefits. But when employees change jobs, some of them open a new EPF account and do not operate their old EPF account. As a result, that account
Employees contribute to Provident Fund for post retirement benefits. But when employees change jobs, some of them open a new EPF account and do not operate their old EPF account. As a result, that account becomes inoperative after 3 years. Employees often are not aware of the process of claiming amount from these inoperative accounts. Government data suggests that there is more than 27000 crore rupees in these inoperative accounts.
The Employees Provident Fund (EPF) was established through an act of Parliament. Both employees & employers contribute to the fund. The fund can be withdrawn by the Employee in case of retirement, resignation or by the nominee in the case of death. While many organizations ensure that a contribution is made to the EPF, employees face problems when they change jobs. Some of them do not transfer their existing EPF money and open an entirely new EPF account with the new employer. As a result, the old EPF account lies inoperative.
Inoperative Accounts
Para 72(6) of the Employees Provident Fun Scheme defines what is known as an ‘Inoperative Account'. Inoperative accounts are a common occurrence when employees change jobs and are not aware of the EPF account details. Since they open a new EPF account, the old account becomes inoperative if the amount is not claimed in within 36 months (3 years).
More than 27000 crore rupees unclaimed in ‘Inoperative Accounts'
In an answer to a question in the Lok Sabha, the minister of Labour & Employment mentioned that as on 31st March, 2014, a total of 27,448 crore rupees was lying unclaimed in these inoperative accounts. Maharashtra leads this list with more than 6700 crores followed by Andhra Pradesh, Delhi, Karnataka & Tamil Nadu, each of which have more than 2000 crore of unclaimed fund.
The government cited the following reasons for such inoperative accounts
• The members after switching the job from one establishment to another do not get the funds transferred to their present account. As a result, the old account becomes inoperative after thirty six months.
• The interest earned on the deposits with EPFO is exempted from Income Tax. Therefore, there exists an incentive of leaving the balance amount with EPFO.
• Such deposits are safe & secure investments and cannot be attached even by a decree of any Court.
While the other two reasons are also valid, a large number of inoperative accounts are because of the first reason. The ministry has taken the following steps to simplify the process of claiming the amount from these inoperative accounts.
• EPFO has launched a portal namely ‘Inoperative Accounts Online Help Desk' to assist the members to identify their inoperative accounts.
• Instructions have been issued to reconcile the Inoperative Accounts on priority and further identify the beneficiaries through employers.
• EPFO has allotted unique permanent numbers to its members called Universal Account Number (UAN) which will enable to identify the members without intermediation of the employers.
Here is how you can claim your EPF amount from the Inoperative Account
The EPFO has launched the Inoperative Account Help Desk. By logging onto this helpdesk, one can identify their inoperative account and then make a claim for the amount. First time users can also go through the user manual. Given below is a step by step process of identifying your inoperative EPF account and using the Helpdesk.
Step 1: Submit the details of your problem in not more than 1000 characters
Once you click the first time user button, you will be presented with a screen where you have to describe your problem in not more than 1000 characters.
Step 2: Enter the details of your Employer/Employment
Once you click next, you will be presented with another form where you have to enter details of your previous employer/employment. None of the fields are mandatory. You are advised to provide as many details as possible so that the identification process becomes easier. To assist you with the identification of your employer's Establishment Code, the portal also has a search option.
You can search for the establishment by location or name or pin code. Once you find the relevant establishment you worked with, select it.
Step 3: Enter your Personal Details
After this, you are asked to enter your personal details. Even here, none of the fields are mandatory except the Name, Mobile Number & Date of Birth. You are advised to provide as many details as possible so that the identification process becomes easier.
Step 4: Mobile Number Verification
Mobile number of the Member will be verified through the PIN sent on his mobile. After the mobile verification, an SMS would be sent to the member communicating his/her reference ID for future reference.
After submitting these details, the EPFO helpdesk will contact the individual and take it forward from there. You could also login and check the status of your issue.
Get your UAN today
To ensure that these issues do not recur in future, it is advised that employees take a UAN (Universal Account Number). The UAN will act as an umbrella for the multiple Member Ids allotted to an individual by different establishments. The idea is to link multiple Member Identification Numbers (Member Id) allotted to a single member under single Universal Account Number. This will help the member to view details of all the Member Identification Numbers (Member Id) linked to it. Employees can get their UAN by registering here.
Are these efforts bearing fruit?
As a result of the efforts, there is a steady rise in the amount paid to beneficiaries from the inoperative accounts. The amount paid to beneficiaries from these inoperative accounts has more than quadrupled from 2011-12 to 2013-14.
(Rakesh Dubbudu has been working on issues related to Right to Information (RTI) for a decade. He is a Data/Information enthusiast & passionate about Governance/Policy issues.)