Opportunity to correct errors in EPS contributions, Know Details
EPFO New Guidelines: 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 many cases, it has been observed that employers deposited EPS contributions for employees who were not eligible for a pension. Conversely, in some cases, employees who were eligible for a pension did not have any EPS contributions deposited on their behalf. These errors were causing persistent difficulties in processing pension claims.
What will happen to ineligible employees? In cases where EPS contributions have been deposited for employees who are not eligible for a pension, the EPFO will recalculate the incorrectly deposited amount. The interest declared by the EPFO will also be added to this amount.
In the case of unexempted establishments, the entire amount will be withdrawn from the pension account (Account No. 10) and transferred to the provident fund account (Account No. 1). Simultaneously, the pension service will be removed from the employee’s record.
In the case of exempted establishments, the EPFO will transfer the incorrectly deposited amount, along with interest, from Account No. 10 to the concerned PF trust, and the incorrect 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 incorrectly excluded from the scheme, the EPFO will now determine the employee’s total outstanding EPS contribution, including interest.
In unexempted establishments, this amount will be transferred from the provident fund account (Account No. 1) to the pension account (Account No. 10). Along with this, the employee’s pensionable service period and, where applicable, the non-contributory period will be added to their record.
In the case of exempted establishments, the concerned PF trust will calculate the outstanding EPS amount with interest and transfer it to the EPFO pension account. EPFO will then update the employee’s pension service record.
What EPFO said about fund transfer and accounting: EPFO has clarified that where necessary, physical transfer of funds will also be carried out to ensure complete accuracy in accounting. The organization states that the objective of these guidelines is to protect the pension rights of employees and to implement a uniform process across all field offices nationwide.
What benefits for employees? EPFO believes that this step will largely eliminate problems related to discrepancies in EPS contributions that could affect pension benefits in the future. This will make it easier for employees to determine their pension at the time of retirement, and their records will be clearer and more reliable.
