An astonishing sum of over ₹54,657 crore is lying unclaimed in inoperative Employees’ Provident Fund (EPF) accounts, according to information obtained through a Right to Information (RTI) application. This revelation, brought to light by Aakash Goel, an engineer, management graduate, and chartered financial analyst, highlights a critical issue within the EPFO.
The RTI response disclosed that the amount of unclaimed money in inoperative EPF accounts has steadily increased over the years. At the end of FY15-16, these accounts held ₹40,865.14 crore, which rose to ₹45,093.41 crore by FY16-17, and further surged to ₹54,657.87 crore by the end of FY17-18. These figures underscore a growing trend of unclaimed funds, reflecting a possible disconnect between employees and their EPF savings.
However, a noticeable dip in the accumulated unclaimed funds was observed in the subsequent years, with ₹1,638.37 crore recorded at the end of FY18-19 and ₹2,827.29 crore at the end of FY19-20. Mr. Goel attributes this decline to a change in the definition of ‘inoperative’ accounts during this period. Initially, accounts were deemed inoperative if they were inactive for three consecutive years. However, the definition was revised to label accounts as inoperative only after the account holder’s retirement. This amendment temporarily reduced the number of accounts classified as inoperative, thus lowering the accumulated unclaimed funds.
Despite these fluctuations, the RTI also revealed efforts by the EPFO to settle claims from inoperative accounts. For instance, ₹5,826.89 crore was paid out in FY15-16, ₹5,246.91 crore in FY16-17, ₹3,618.56 crore in FY17-18, and ₹2,881.53 crore in FY19-20. Yet, the bulk of the funds remains unclaimed, raising concerns about the efficiency of the EPFO’s outreach and claim settlement processes.
Adding to the complexity, the Department of Economic Affairs (DEA) mandates that unclaimed funds in EPF accounts should be transferred to the Senior Citizens Welfare Fund (SCWF) after remaining unclaimed for seven years. However, the RTI response confirmed that no such transfers had occurred, raising further questions about the management of these funds.
With recent amendments reinstating the classification of accounts as inactive after three years of no transactions, the volume of unclaimed funds is expected to rise. This situation calls for more proactive measures by the EPFO to trace account holders and ensure that employees can easily access their hard-earned savings. The government and EPFO must prioritize these efforts to reduce the staggering amount of unclaimed money and safeguard the financial security of millions of workers.
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