Nominee vs legal heirs: Who will have an upper hand in EPFO fund distribution?
The Employees' Provident Fund Organization (EPFO) is a retiral body which provides retiral benefits like provident fund, employee pension or family pension to the dependents of the employee in case of death. The Employees’ Provident Fund scheme provides that the employer is required to deduct 12% of the aggregate basic wages & dearness allowance and contribute a matching amount. EPFO declares the annual interest on the provident fund accumulations. Employees can withdraw the provident fund accumulations at the time of superannuation.
Employees at the time of taking membership of the EPF or EPS Scheme are required to provide nomination details to the employer and after verification, the employer shall submit the same to EPFO.
In the event of the death of the member, the amount standing to his credit becomes payable to the nominee(s). Here are five legal challenges/issues:
In the event of death, where no person is declared as nominee or the person declared as nominee has no title, the accumulations standing to the credit of the member shall be paid to the legal heirs of the member in accordance with the applicablesuccession laws.
InAnonio Joao Fernandes V. Assistant Provident Fund Commissioner (2010) 127 FLR 849 (Bom), the Bombay High Court held that a person entitled to succeed as a legal heir under the law of succession shall be entitled to the entire amount of provident fund of the deceased.
In case the member declares nomination only in respect of certain part of the total provident fund accumulations, the amount to which nomination does not relate shall be paid to the members of the family in equal shares.
According to the Employee Pension Scheme, family comprises of wife, in case of male member; husband in case of
Read more on livemint.com
