EPFO New Guidelines: EPFO has recently shared some information for the accounts of its members and beneficiaries, which also gives information about the changes.
EPFO New Guidelines: The Employees’ Provident Fund Organization (EPFO) has issued new guidelines to ensure that the funds set aside for beneficiaries are properly distributed to the right claimants. These guidelines address the transfer and withdrawal of funds from accounts that have become inactive or have not had any transactions.
The EPFO has identified some provident fund accounts that have been inactive for a long time. Verification has been made mandatory while withdrawing money from these accounts to prevent potential fraud and forgery. This was outlined in a circular issued on August 2.
The main goal is to protect the funds deposited in these accounts from unauthorized payments. To achieve this, the EPFO will implement strong processes like biometric authentication and regular KYC updates.
According to paragraph 72(6) of the EPFO scheme, some accounts have been marked as ‘dormant accounts’. Now interest will stop being paid on these accounts. In such a situation, their verification is necessary first.
According to the revised information, the account becomes inactive when the account holder reaches the age of 58 years, which is 36 months after the retirement age of 55 years. According to paragraph 60(6) of the EPF Scheme, 1952, interest is not credited to inactive accounts. However, interest will be credited till the member turns 58 years old.
Non-transactional accounts are those in which there is no activity other than periodic interest credited in three years. So these accounts are considered inactive due to lack of transactions in the last three years.
EPFO said that non-transactional accounts will require greater caution. Also, the existing claim settlement and verification processes for these accounts should be revised to ensure greater scrutiny during processing and settlement.
