In a relief for employees who are locked out of their savings because of an overlap in service periods, the Employees Provident Fund Organisation (EPFO), the state-backed retirement fund manager, has issued instructions that claims of such subscribers can’t be rejected.
An overlap in service period occurs when an employee is shown to be working in two different companies on the same date and this can happen when the exit date from one company and the joining date in another firm overlap due to various technical reasons or errors.
“It has been observed that transfer claim requests are being rejected due to the issue of overlap in service periods by the regional offices. However, overlapping in services can occur due to genuine reasons and therefore the same should not be considered to be a disqualification per se in effecting transfers,” a circular issued by the EPFO to all its offices on May 20 states.
Provident funds provide retirement income and a financial safety net for nearly 70-million salaried Indians. It is often the key corpus of lifetime savings for working people.
The EPFO said transfer claims, where a previous PF account is sought to be transferred to a current one to consolidate the savings, which can then be withdrawn, should be processed even if there are overlapping services. Such transfer claim requests should be paused only in cases where a genuine need for clarification is felt, the circular said.
{{/usCountry}}The EPFO said transfer claims, where a previous PF account is sought to be transferred to a current one to consolidate the savings, which can then be withdrawn, should be processed even if there are overlapping services. Such transfer claim requests should be paused only in cases where a genuine need for clarification is felt, the circular said.
{{/usCountry}}“Only in cases where a genuine need is felt to clarify the overlapping of service, would the claims be processed after obtaining the requisite clarification,” the order said.
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“This is great relief because let’s say, an employee worked for 20 years and there’s an overlap of even a single day between any of the employee’s two companies, then the money used to get blocked,” said personal finance expert Kunal Kabra of Kustodian.Life.
In such cases, in the event of an employee’s death, it was impossible for survivors of the PF subscriber to get funds released, according to Kabra.
The latest circular is part of a series of reforms at the retirement funds body by the Union labour ministry. Among key steps taken recently, employees are no longer required to submit clearances from and attestation by their HR department for withdrawals and settlement of claims. Both these processes have been moved completely online.
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Employees also won’t need to submit cheque leaves and bank-attested updated passbooks while filing claims, especially for partial withdrawals due to financial emergencies, such as sudden health expenses, educational financing needs and marriages.
To be sure, the EPFO’s online services are still hobbled by slow processing and server-end issues, but officials say these will get resolved by June-end when an overhaul of the EPFO website will get over.