EPFO announces new EPS rules: What changes for you?
What's the story
The Employees' Provident Fund Organisation (EPFO) has issued new rules to fix cases of incorrect or missing Employees' Pension Scheme (EPS) contributions. The move is aimed at ensuring accurate pension records and smoother service delivery for its members. The EPFO circular highlighted instances where employers either incorrectly deposited EPS contributions for ineligible employees or failed to remit them for eligible ones, causing complications in processing pension-related claims.
Correction procedures
EPFO outlines corrective procedures for establishments
To standardize the handling of these cases, the EPFO has outlined corrective procedures for both exempted and unexempted establishments. In cases where EPS contributions were wrongly remitted for ineligible employees, the erroneous pension amount will be recalculated with interest at the rate declared by the organization. For unexempted establishments, this total amount will be transferred from Account No. 10 (pension account) to Account No. 1 (provident fund account), deleting the corresponding pension service from member records.
Exempted establishments
Approach for exempted establishments
For exempted establishments, the EPFO will transfer the wrongly remitted amount with interest from Account No. 10 to the respective PF Trust. The organization will also remove any incorrect pension service from member accounts in such cases. This uniform approach is part of EPFO's efforts to protect members' pension entitlements and ensure consistent implementation across all field offices, thereby avoiding future discrepancies in pension benefits due to incorrect EPS contributions.