High rejection rate for claims: EPFO board may meet soon

financialexpress.com:

At a time of high joblessness, stagnant real rural income and slackness in consumption demand, the pensioners are facing the problem of higher rejections in the settlement of their employees’ provident fund (EPF) claims.

The higher rate of rejection of claims by the EPF organisation (EPFO) is despite a rise in the settlement rate in recent years (see chart). Worse, the rejection rate is higher for those seeking final settlement.

EPFO members seek final settlement after retirement or having been retrenched. They are also not supposed to have a job in any establishment covered under the governing Employees Provident Funds & Miscellaneous Provisions (EPF&MP) Act, 1952, to qualify for the final settlement.

According to official sources, the EPFO’s highest decision-making body, the Central Board of Trustees (CBT), will likely deliberate on the issue of delay and rejection of claims in its next meeting. This also follows a member flagging the matter to the Central Provident Fund Commissioner (CPFC), Neelam Shami Rao. The date for the next sitting has not been decided yet.

In a recent letter to Rao, CBT member S P Tiwari wrote: “The EPF members retiring from the services are filing applications online to get their full and final settlement, which is either painfully delayed or rejected on frivolous grounds and needs to be addressed on a priority basis.”

The rejection rate for all claims has increased from 22% in FY19 to around 28% in the last three financial years. The most pronounced deterioration has been witnessed with regard to the final settlement claims, where the rejection rate rose to 34% in FY23 – meaning one in three claims – from 18% in FY19. Experts attribute the rise to technical issues and data mismatch.

“The