EPFO Update: If you are an EPFO member, then this article is made for you. The Employees’ Provident Fund Organisation (EPFO) has issued new guidelines to resolve cases of incorrect or incomplete contributions related to the Employees’ Pension Scheme (EPS). The aim is to correct pension records and simplify pension claims for employees.

The EPFO ​​stated that in several cases, employers deposited EPS funds for employees who were not eligible for pension. In some cases, employees who were eligible for pension were not credited with EPS contributions. These errors resulted in persistent difficulties in processing pension claims.

Why was the new system necessary?

According to the EPFO, these discrepancies in EPS contributions were causing difficulties for employees in processing pensions, adding service periods, and final settlements. These matters were being handled differently in different field offices, leading to confusion and delays. To address this, the EPFO ​​has established a uniform and clear process.

What will happen to unqualified employees

In cases where EPS contributions have been deposited for employees who are not eligible for pension, the EPFO ​​will recalculate the wrongly deposited amount and add the interest declared by the EPFO. In the case of unexempted institutions, the entire amount will be withdrawn from the pension account (Account No. 10) and transferred to the Provident Fund account (Account No. 1). Additionally, the pension service will be removed from the employee’s record. In case of exempted institutions, EPFO ​​will transfer the wrongly deposited amount along with interest to the PF Trust in Account No. 10 and the wrong pension service will also be deleted from the employee’s account.

What will be the process for eligible employees?

If an employee was eligible for EPS but was wrongly excluded from the scheme, EPFO ​​will now settle the entire outstanding EPS contribution of that employee along with interest. In non-exempt organizations, this amount will be transferred from the Provident Fund account (Account No. 1) to the Pension account (Account No. 10). The employee’s pension service period, and, where applicable, the non-contributory period, will also be added to his or her record. In the case of exempted institutions, the relevant PF trust will calculate the outstanding EPS amount, along with interest, and transfer it to the EPFO ​​pension account. The EPFO ​​will then update the employee’s pension service record.

What did EPFO ​​say on fund transfer and accounting?

The EPFO ​​has clarified that physical transfers of funds will be made where necessary to ensure accurate accounting. The organization states that these guidelines are intended to protect employees’ pension rights and implement a uniform process in all field offices across the country. The EPFO ​​believes this move will significantly eliminate future pension benefit issues arising from EPS contribution errors. This will reduce employee pension settlement hassles upon retirement, and ensure clearer and more reliable records.