EPFO sees 7.8% rise in claims settled, subscribers up by 7.6%: Labour Ministry

The latest numbers were presented during the 109th meeting of the Executive Committee, Central Board of the retirement fund body chaired by Labour Secretary Sumita Dawra on November 8 where the Annual Report for the year 2023-24 was taken up for discussion. The meeting of the Executive Committee last week came ahead of the meeting of the Central Board of Trustees of the EPFO on November 23 and the 72nd EPFO Foundation Day on November 15. The annual report for 2023-24 will be taken up for discussion in the upcoming CBT meeting along with discussion on pension, centralised pension payment and audited accounts for 2021-22 and 2022-23.

Reform agenda for the EPFO was the key topic of discussion in the meeting held last week. While noting that the speed for EPFO procedures has improved after the updated software for field applications was put in place across the country, the Ministry said “regular and close review of EPFO offices is to remain a priority”. It has been decided that the Executive Committee will meet monthly for the next few months to “regularly monitor and review the reform agenda”, including modernisation projects and other ongoing initiatives.

The high rate of rejection of EPF claims has been a concern for the retirement fund body and the Ministry has been taking measures to improve the claims settlement rate. In February this year, The Indian Express had reported that the rejection rates of PF final settlement had surged, up from around 13 per cent in 2017-18 to nearly 34 per cent in 2022-23. The rejection rate, calculated as a percentage of rejected claims out of total applications for claims, had increased from around 13 per cent in 2017-18 to 18.2 per cent in 2018-19 to 24.1 per cent in 2019-20, 30.8 per cent in 2020-21 and 35.2 per cent in 2021-22 for final PF settlement claims. Overall, in 2022-23, the total claims for final PF settlement, transfer claims, and part withdrawal claims for the EPFO were 5.21 crore, as per the Annual Report for 2022-23. Out of this, 1.34 crore or 25.8 per cent claims were rejected, while 3.77 crore or 72.4 per cent claims were settled. About 9.38 lakh or 1.8 per cent claims remained as closing balance at the end of 2022-23.

In the November 8 meeting, several other proposals related to information technology, administrative and financial matters of the EPFO were discussed. The recent relaxation in the criteria for auto-settlement of claims such as the ceiling as well as the categories for claim by the EPFO earlier this year were also discussed in the meeting. In May, the EPFO had hiked the ceiling for auto-mode settlement of advance claims for education, marriage and housing to Rs 1 lakh from Rs 50,000. Steps to enable centralised pension payment as well as the interventions for improving IT-related software and hardware were also discussed in the Executive Committee meeting along with timelines for completion of overhaul of the IT system of the EPFO, the Ministry said.

The Executive Committee also discussed the draft of the New Compassionate Appointment Policy, 2024, which aims to bring relief to the dependents and wards of many employees of EPFO, who had died on duty, mainly during the Covid pandemic period. It also approved the hiring of two chartered accountant firms for the preparation of annual financial statements of the EPFO, and to facilitate the automation of the process of preparation of financial statements, the Ministry said. “This will ensure that the annual accounts are prepared timely, and bring in professionalism and latest practices in the process,” it said.