EPFO: A lot of employees are puzzled about the pension deductions from their paychecks. Is the pension amount actually deposited into the EPS account or not? To clear up this confusion, the EPFO has released a circular. According to this new circular, if the employer (the company) mistakenly deposits the wrong amount into the EPS, how will that be fixed? Don’t worry, the employee won’t face any loss.
The EPFO has acknowledged that companies have made two main types of errors. First, they deposited money into EPS for employees who aren’t eligible for the pension scheme. Second, they failed to deposit pension funds for those who are eligible for EPS, and instead, the money went into the PF account.
So, what happens if money is incorrectly deposited into EPS?
The EPFO states that if funds have been sent to an ineligible employee’s EPS account, the amount will be recalculated. The money will then be moved to the correct PF account with interest added. Plus, any mistakenly added pension service period will be removed from the records to avoid future mistakes.
In these situations, the EPFO will determine the correct pension contribution, including interest, and transfer it to the EPS account. They will also add the employee’s pension service period. If there’s a Non-Contributory Period (NCP) in between, it will be adjusted accordingly.
Should employees be concerned?
The EPFO has made it clear that these mistakes won’t lead to any financial loss for subscribers. Every adjustment will include interest, and pension records will be updated. This is really important because having accurate EPS records is essential for receiving pension and benefits after retirement.