EPFO Hikes Limit For Auto-Claim Settlement Facility To Rs 1 Lakh

In its 236th meeting attended by Union labour minister Mandaviya, the CBT adopted a slew of initiatives to simplify processes benefitting both employers and employees.

New Delhi: The EPFO has increased the limit for auto claims settlement facility from Rs 50,000 to Rs 1 lakh which includes advances for housing, marriage and education and 1.15 crore claims have been settled through the automated channel in the current financial year. This was revealed in the 236th meeting of the Central Board of Trustees (CBT) in New Delhi on Saturday, attended by Union labour minister Dr Mansukh Mandaviya, CBT vice-chairperson Shobha Karandlaje, labour secretary Sumita Dawra and CPF commissioner Ramesh Krishnamurthi.

The Board was also apprised of the decrease of 14 per cent in the rejection ratio in November 2024. During the FY24, EPFO settled 4.45 crore claims worth Rs 1.82 lakh crore and 3.83 crore claims valuing over Rs 1.57 lakh crore have already been settled.

With the implementation of the CITES 2.01 project, EPFO is upgrading both hardware and software. Under the project, newer versions of operating systems are being deployed which will result in simplification of the claim settlement process. The software module will enable UAN-based accounting resulting in one member, one account system thereby reducing hassles for members in claim settlement.

Benefit of Members

The meeting approved a significant amendment to paragraph 60(2)(b) of the EPF Scheme, 1952 by providing interest to the member till the date of settlement, which is expected to extend financial benefits to them and reduce grievances. As per existing norms, for the claim settled by the 24th of the month, interest is paid only up to the end of the preceding month.

The CBT was apprised of the fact that the first pilot of the Centralized Pension Payment System (CPPS) was successfully completed in October in Karnal, Jammu and Srinagar. The second pilot was taken up in November in 20 additional regional offices where Rs 195 crore has already been disbursed to 8.3 lakh pensioners.

CPPS is set to be implemented as part of the EPFO’s IT modernisation project, CITES 2.01, which is expected to be operational from January 1, 2025. About 78 lakh pensioners will benefit from the scheme which includes streamlined pension disbursement, allowing access to pensions anywhere in the country, thus expediting claim processing and eliminating the need for bank visits for verifications or undertaking submissions.

CBT ratified the extension of EDLI benefits with retrospective effect from April 28. This will provide a minimum benefit of Rs 2.5 lakh and a maximum benefit of up to Rs 7 lakh. The proposal, supported by actuarial valuation indicating a surplus of Rs 6,386 crore has been approved to ensure uninterrupted benefits to EPF members.

The Board approved the 71st Annual Report of EPFO for the year 2023-24 with a recommendation to place it before the parliament.

Employer-centric benefits

It was approved in the meeting to simplify the criteria for empanelment of banks for centralised collection of EPF contributions. It will now include all agency banks listed with RBI. Additionally, the CBT has also approved the empanelment of other scheduled commercial banks with a minimum of 0.2 per cent of total EPFO collection.

The EPFO Amnesty Scheme 2024 is designed to encourage employers to voluntarily disclose and rectify past non-compliance or under-compliance without facing penalties or legal repercussions. A simple online declaration from employers will be sufficient to avail of the scheme benefits.

Enhanced returns to members

CBT also approved a Redemption Policy for ETF investments in CPSE and Bharat 22 to generate income for the EPF Scheme's 'Interest Account.' The policy mandates a minimum five-year holding, returns exceeding government securities, and performance above the CPSE and Bharat 22 indices.

EPFO Establishment and HR-related decision

The minutes of the 235th CBT meeting held on February 10 were also placed for the Board's confirmation. Further, minutes of the meetings of sub-committees of CBT were also placed for information. Aside from this, a policy for Compassionate Appointment in EPFO, 2024 was approved where the eligibility criteria and cut-off for admissibility points for compassionate appointment have been relaxed. It will bring relief to the dependents and wards of employees, who died in harness.