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Every month a fixed portion of Provident Fund (PF) is deducted from the salary of every salaried employee working in private and organized sector. Most employees consider it just a means of retirement savings or earning interest, but very few people know that EPFO account not only provides provident fund to its members, but also provides free life insurance up to ₹ 7 lakh under Employee Pension Scheme for old age (EPS-95) and Employee Deposit Linked Insurance (EDLI) scheme which provides financial security to the family in case of untimely death. The biggest thing is that for this insurance protection, not a single rupee is deducted from the employee’s pocket as premium, rather the entire expense is borne by the employer i.e. the company. However, often due to the necessary formalities and profile not being updated at the right time, in case of emergency, the employee or his dependents have to face huge difficulties in getting the claim of these schemes.
The benefit of EDLI insurance and pension of ₹7 lakh under the Employees Provident Fund Organization is directly linked to the nominee. If any untoward incident happens to an employee, his family or dependents get the accumulated PF fund, monthly pension and insurance amount without any legal hassles only if digital e-nomination is registered in the account. According to the current rules of EPFO, in the absence of e-nomination, the process of online claim settlement may get stuck and the family may have to visit companies and government offices for death claim. To accomplish this, the employee has to visit the Unified Member Portal of EPFO and select the option of ‘e-Nomination’ in the ‘Manage’ section, where the Aadhaar, photo and bank details of the family members can be entered and the e-sign can be done through Aadhaar-OTP within minutes.
Every PF account holder is allotted a 12-digit Universal Account Number (UAN), which remains his financial identity throughout the service period. Many employees forget to activate UAN after starting a new job or leave the old mobile number registered in it. Without an active UAN and updated mobile number, you can neither view your passbook nor make any withdrawal or claim. Also, as per EPFO rules, it is legally mandatory for UAN to be linked and verified with Aadhaar card. If there is even a slight difference in the spelling of name, date of birth or father’s name in your Aadhaar, PAN and EPFO records, the system immediately rejects your online claim. Therefore, go to the portal and ensure KYC verification by matching all the personal information verbatim in the profile section.
PF withdrawal, advance claim or pension money is sent directly to the member’s bank account through electronic transfer. In such a situation, if your bank account has become inactive, IFSC code has changed due to merger of the bank, or the account has been closed, then even though the claim is passed, the payment fails at the bank end. Always register only that savings account on the EPFO portal which is fully active, in which your name is written exactly as it is in the Aadhaar and PF records. When you add a new bank account on the portal, it is approved by the employer through a digital signature and then bank verification is completed through National Payments Corporation of India (NPCI), so there is no risk of money getting stuck in any future withdrawal.
Often people leave one company and go to another company to advance in their career, but after leaving the old job, they forget to register its ‘Date of Exit’. Unless the exit of the old service is updated on the portal, neither you can transfer the old PF balance to the new account online nor is your service period considered continuous. An EPFO member becomes entitled to Life Monthly Pension (EPS) only after completion of 10 years of continuous eligible service. If you do not transfer midway, your service history may get broken which directly impacts your future pension calculation and continuity of EDLI insurance. Now EPFO has given the facility to the employees to ‘Mark Exit’ by visiting the member portal themselves, after which online transfer request can be submitted through Form-13.
These three schemes of EPFO—PF, Pension and Group Term Insurance—act as a comprehensive social security system for any working person and his family. If a member completes these four formalities on time while in service, then in case of any unfortunate incident, his family members do not need any intermediary or lengthy paperwork and the amount of insurance and funds directly reaches the account through DBT. In this era of technology, all the work of EPFO can be completed in a few minutes from mobile or laptop sitting at home, so check your PF account in time and complete these four priorities without any delay.