Claim settlement delays arising from EPFO’s IT crisis. Details here

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Employees’ Provident Fund Organisation (EPFO), the world’s largest social security organization boasting more than 277 million accounts and a fund corpus of approximately ₹20 lakh crore, have expressed their concern about being under “extreme pressure" as reported onHindustan Times. This pressure stems from the recent reversion to manual annual account updates by the EPFO, while they are held accountable for any delays in claim settlements beyond the stipulated 20-day timeframe.

The root of this issue lies in the organization’s outdated IT system, which employees perceive as obsolete. Weeks before the proposed grand celebrations of EPFO’s 71st Foundation Day on November 1, 2023, the Employees’ Provident Fund Officers’ Association (EPFOA), in a letter to the government said while claims rejection ratio is an “important barometer" to analyse performance, this metric “cannot be brought down without software intervention" as organization’s current software is working on “GIGO" principle.

In information technology (IT) “garbage in, garbage out" (GIGO) means a flawed input will result in a faulty output. In a letter dated October 3 this year, addressed to CPFC, EPFOA said, “Our current application software on which bulk of our operations is run is of 2008 vintage." It listed some of the standard software under use —Windows Vista (2008), IOS 3 (now IOS 17 is available), and Android version 1 (now version 14 is available).

“We understand that C-DAC [Centre for Development of Advanced Computing] had, sometime in the year 2019 given a comprehensive proposal for system revamp. EPFO paid consultancy charges for procuring the said recommendation.