Your provident fund savings are your retirement corpus. In one case of what the consumer court saw as a delay in disbursal of claim amount, retiree has been awarded a 6% interest payment on the claim amount.A consumer court has ordered the Employees’ Provident Fund Organisation (EPFO) to pay 6 per cent annual interest to a retired employee after finding a 35-day delay in the settlement of his provident fund claim worth more than Rs 14 lakh.
What the EPFO claim settlement delay case is about
The Mumbai Suburban District Consumer Disputes Redressal Commission, in an order issued last week, held the statutory organisation responsible for deficiency in service, observing that the claim should have been settled within the stipulated 20-day period under the EPF Scheme, 1952.The complainant, who had earlier worked with Fleet Maritime Services (India) Pvt Ltd, told the commission that he had submitted a complete PF claim on October 19, 2016. According to him, the EPFO did not process the claim within the prescribed timeframe.The EPFO, however, disputed the allegation of delay. It said the original claim did not include the required joint declaration and was therefore returned on November 7, 2016. The organisation said it received the complete set of documents only on December 2, 2016.The provident fund claim was then settled on December 14, 2016, within 20 days of receiving the complete documents, the EPFO argued. It therefore maintained that there had been no delay on its part.
Why retiree won the case
The Mumbai Suburban District Consumer Disputes Redressal Commission did not accept the EPFO’s explanation. It pointed out that the EPFO had failed to place on record any written rejection letter or communication informing the complainant about deficiencies in his original submission.The absence of such documentation meant the organisation could not establish that the claim filed on October 19 was incomplete.“On the evidence available on record, the Opposite Party has failed to satisfactorily establish that the claim was incomplete on 19.10.2016,” the commission said according to PTI.The commission held that the EPFO was required to process and settle the claim within the prescribed period and that its failure to do so amounted to “deficiency in service”.It directed the EPFO to pay interest at 6% per annum on the claim amount of Rs 14,06,272 for the 35-day delay, covering the period from November 9, 2016, to December 13, 2016.The EPFO has been given 45 days to comply with the order.
EPFO partial settlement to get easier
In a separate development, EPFO has streamlined its partial PF withdrawal framework by consolidating 13 separate provisions into three broad categories: Essential Needs, Housing Needs and Special Circumstances.Under the revised framework, members can withdraw up to 100% of their eligible PF balance, while the withdrawal limits for education and marriage have also been increased. The minimum service requirement has been reduced to 12 months.Another key change is that members can seek withdrawal under the ‘Special Circumstances’ category without having to provide a reason. The reform is intended to facilitate 100% auto-settlement of eligible claims, while retaining 25% of the PF balance as an amount invested for retirement.
EPFO ATM, UPI withdrawal
EPFO subscribers may soon be able to access their provident fund money through a UPI payment gateway and transfer the withdrawn amount directly into their bank accounts, Labour minister Mansukh Mandaviya has said. The facility has already undergone successful testing and is now being prepared for rollout.“”We have completed the testing of the facility where members can withdraw EPF (employees’ provident fund) through the use of the UPI payment gateway. The withdrawn amount will be directly transferred into the bank account of the member,” Mansukh Mandaviya said in May this year.Under the proposed system, a part of the provident fund corpus will continue to remain frozen, while another portion will be made available to subscribers for withdrawal. Members will be able to access the eligible amount through their bank accounts using Unified Payment Interface (UPI).Subscribers will be able to see the balance that is eligible for transfer and make that amount available through their bank account. The system will allow them to use the UPI PIN linked to their account to complete the transaction, providing a secure way to transfer the money into their bank account. EPFO is also working on enabling ATM withdrawals from PF balances.
Auto-settlement limits
At present, members have to submit withdrawal applications, a process that can sometimes take time. Under the auto-settlement system, however, eligible withdrawal claims are processed electronically without manual intervention. Subscribers can receive the money within three days of submitting the application form.The ceiling for auto-settlement has also been raised recently to Rs 5 lakh from the earlier Rs 1 lakh. Through this facility, members can access funds within three days for requirements including marriage, education, illness and housing.
