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Sunday, May 3, 2015

Unclaimed EPFO funds

Unclaimed EPFO funds


GOVERNMENT OF INDIA
MINISTRY OF  LABOUR AND EMPLOYMENT
RAJYA SABHA

UNSTARRED QUESTION NO-707
ANSWERED ON-29.04.2015

Unclaimed EPFO funds

707 . Shri D. Raja

(a)whether Government’s attention has been drawn to the announcements made by the Finance Minister in his budget speech that the unclaimed Employees’ Provident Fund Organisation (EPFO) funds will be transferred to the proposed Senior Citizen Welfare Fund and another to let low wage earners choose between Provident Fund and National Pension Scheme;

(b)if so, the details thereof and the response of the Ministry thereto; and

(c)the estimated unclaimed funds so far, the main reasons for not having claimants and the steps proposed to the taken to make the claims hassle-free for the dependents of the deceased contributors who have failed to give their nominees?


ANSWER

MINISTER OF STATE(IC) FOR LABOUR AND EMPLOYMENT
(SHRI BANDARU DATTATREYA)

(a) & (b): Union Finance Minister in his Budget Speech for the year 2015-16 has proposed the creation of a Senior Citizen Welfare Fund from approximately Rs. 6000 crore unclaimed deposits in Employees’ Provident Fund (EPF) corpus and Rs. 3000 crore in Public Provident Fund (PPF) for appropriation of these amounts to a corpus which will be used to subsidize the premiums of vulnerable groups, such as, old age pensioners, BPL cardholders, small and marginal farmers and others. Besides, with respect to EPF, the Budget Speech mentions about providing options to the employee to opt EPF or New Pension Scheme (NPS). Employees’ Provident Fund Organisation (EPFO) maintains a corpus of contributions and deposits made by its members. As per the Employees’ Provident Funds & Miscellaneous Provisions (EPF & MP) Act, 1952, employee/member is free to claim the amount at any time. EPFO maintains a record of “inoperative accounts” which are defined as “accounts wherein there has been no deposit/withdrawal in the last 3 years or more”. Under the provision of the Act, the said corpus is maintained by EPFO as a “Trustee”. An amendment to EPF & MP Act, 1952 is required to implement the Budget announcement for providing options to the employees to opt EPF or New Pension Scheme (NPS). The same has been included in the proposed comprehensive amendment to the EPF & MP Act, 1952. 

(c): As per Annual Accounts of the EPFO for the year 2013-14, an amount of Rs. 27,448.54 crore has been classified as Inoperative Accounts.

All these accounts have legitimate claimants. The amount paid to the claimants from Inoperative Accounts in the last three years is as follows:

Financial 
Year Amount paid 
(Rs. in crore)
2011-12 955.51
2012-13 2890.40
2013-14 4316.71

As per para 70(iii) of EPF Scheme, 1952, in case no nomination or family members subsists, the whole amount shall be payable to the person legally entitled to it.

Source: http://rajyasabha.nic.in/

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