EPFO issues new rules for inoperative, inactive EPF accounts to stop frauds: Check the latest details
Aug 5, 2024
Synopsis
EPF inoperative inactive accounts unblock: The Employees Provident Fund Organisation (EPFO) has issued new guidelines to make the inoperative and inactive, transaction-less accounts active again. The new rules are issued to stop the frauds and also to ensure proper verification is done before money in credited into the claimant bank accounts.
The EPFO circular emphasises the need for more thorough verification of EPF members with transaction-less accounts.
To make life easier for the Employees’ Provident Fund (EPF) account holders, the Employees’ Provident Fund Organisation (EPFO) has issued new guidelines for inoperative and transaction-less EPF accounts. According to a circular issued on August 2, 2024, the EPFO said, “In order to handle transaction-less and inoperative accounts, the field offices should do a stronger due diligence so that, cases of impersonation/identity theft or otherwise do not occur.”
According to EPFO, transaction-less accounts are those accounts where no transaction (no debit or credit of contribution other than crediting of periodic interest) has taken place in three years. The transaction-less accounts can be considered inactive accounts due to no transactions taking place for three years.
As per the amended definition, an account becomes inoperative after 58 years, i.e., 36 months after the retirement age of 55 years. As per the amended definition, an account shall be classified as Inoperative after the member attains the age of 58 years.
As per the EPFO circular, the unblocking of such EPF accounts can take up to 20-25 days from the date of submission, depending on the type of account and verification process required.
In the case of transaction-less accounts
As per the circular from EPFO, different situations regarding the presence of a Universal Account Number (UAN) may arise in an account with no transactions. Instances may occur where existing UANs are present but are not linked with Aadhaar or KYC compliant.
Source: EPFO circular, August 2, 2024
If there are no UAN in transaction-less accounts, then the first step is to generate UAN. However, UAN cannot be generated via normal, routine processes for these accounts. This is because these accounts have been inactive for a long time. An EPF account holder has to visit the field office physically to generate a new UAN or link the EPF account to the existing UAN.
EPF members can schedule an appointment via the EPFiGMS portal before a physical visit. An EPF member will be given an appointment token number, date, time, and place for biometric verification. An SMS regarding the same will also be sent to the EPF member. Other verification such as photo capture of the EPF member should be done before the generation or linking of UAN.
In case the EPF member is unable to visit the field office due to physical disability, old age etc., they can generate a request for UAN generation on the EPFiGMS portal. A representative of the EPFO will visit the member’s home for biometric verification and UAN generation. In the case of transaction-less accounts, UAN can only be generated by field offices.
The EPFO field offices are required to ensure that there is no active UAN before generating one for the transaction-less accounts.
Once the EPF account is linked to the UAN, the next step is the KYC seeding of all such accounts. If the former employer is still operational, it is necessary for an EPF member to contact them to link their KYC. If the employer does not complete the KYC within 15 days, the field offices have the authority to perform the KYC directly. If the previous employer no longer exists, the field offices are permitted to directly carry out the KYC process.
KYC will be done via PAN, Aadhaar and bank account of the EPF member.
Once the UAN is linked to the EPF account and the KYC process is completed, the EPF member is required to request for the unblocking of the EPF account.
The EPFO circular emphasises the need for more thorough verification of EPF members with transaction-less accounts. It highlights the importance of gathering information from multiple sources, and proposes sending a verification alert to the active UAN holders working in the same establishment during the same period to confirm the PF membership of the claimant.
A notification or message will be sent to 20 active UAN holders who have worked during the same period as the claimant on a random basis. The message will contain details and a photo of the claimant being verified.
Confirmation of 5 active UAN holders will be needed for verification purposes.
An EPF member can file online claims once the EPF account is linked to UAN, KYC seeded and unblocked by the EPFO authorities. To further prevent fraud in these accounts, another level of security will be put in place.
Inoperative accounts
The inoperative accounts that are also transaction-less accounts will be dealt with via the process mentioned above. However, there are different guidelines for inoperative accounts that are not transaction-less accounts.
Inoperative accounts for less than 3 years linked to UAN (KYC seeded): Such EPF members can file online requests to unblock their inoperative accounts. The online request must be approved by the employer and/or field offices. If the request is accepted, then the EPF account will be unblocked. Else if rejected then reasons for the same will be given.
Inoperative accounts for more than 3 years linked to UAN (KYC seeded): For such EPF accounts, unblock requests can be submitted either online via the member portal or physical visit to a field office. Once the request is submitted, the same process as verification of transaction-less accounts will be followed. Online claims or transfer claims can be filed only once the request has been approved.
Inoperative accounts linked to UAN (KYC not seeded): If the KYC is not done in inoperative accounts, then EPF members are required to approach their old employer for this. If the old employer currently does not exist, then the EPF member has to physically visit the field office to get the KYC done. Once the KYC is done, the unblock request can be submitted online.
In case of the death of an EPF member
For EPF accounts where an EPF member has passed away, the nominee can file the claim for the amount lying in the PF account. The field offices shall do the UAN generation and KYC seeding before processing the claim. The biometric authentication of the concerned nominee shall also be done. The nominee can file an online claim if there is an e-nomination or else visit the concerned field office for submission of documents. The documents must be verified by the old employer. If verification is not possible by the employer, then the documents may be attested by the competent authorities.
[The Economic Times]
