EPFO Rejection Rate Soars: Climbs from 13% to 34% in 5-Year Span, Reveals Data.
Indian Express reports a startling revelation: the Employees’ Provident Fund Organisation (EPFO) has rejected one-third of all claims it received, raising concerns among stakeholders.
On the official X handle of EPFO, numerous subscribers have voiced their grievances regarding delays in claim settlement. EPFO, recognized as the world’s largest social security organization with over 277 million accounts and a corpus of nearly ₹20 lakh crore, faces mounting concerns from its vast subscriber base.
Responding to a query on the matter, the pension body clarified that it typically takes 20 days to settle a claim or release the PF amount, provided that all necessary documents are complete and submitted to the concerned EPFO office.
Official data reveals a significant trend: out of the total 73.87 lakh claims received for final PF settlement in the financial year 2022-23, 33.8% (24.93 lakh) were rejected, leaving 46.66 lakh settled and 2.18 lakh remaining as closing balance.
This rejection rate marks a notable increase compared to previous years, with rejection rates in 2017-18 and 2018-19 standing at nearly 13% and 18.2% respectively, indicating a concerning upward trend in claim rejections.
The rate of rejection, measured as a percentage of rejected claims out of the total applications for claims, witnessed a steady increase in recent years. In 2019-20, the rejection rate for final settlement claims jumped to 24.1%, followed by a further increase to 30.8% in 2020-21.
The trend continued in 2021-22, with the rejection rate for final settlement claims soaring to 35.2%. This staggering figure signifies that more than one-third of the total claims received by the pension body were ultimately rejected, highlighting ongoing challenges in the claim settlement process.
Amidst mounting challenges, officials at the Employees’ Provident Fund Organisation (EPFO) conveyed their apprehension regarding the “extreme pressure” they face. This pressure is attributed to the recent shift back to manual annual account updates by the EPFO, placing additional burdens on officials who are now held responsible for any delays in claim settlements surpassing the mandated 20-day timeframe.
The primary cause of this issue has been attributed to the organisation’s outdated IT system, deemed obsolete by the staff of the pension fund body.
In a significant announcement, the Central Board Trustees of EPFO on February 10 recommended an annual interest rate of 8.25% to be credited on EPF accumulations in members’ accounts for the financial year 2023-24.
Furthermore, the Board proposed a distribution of income amounting to ₹1,07,000 crores to EPF members’ accounts, based on a total principal of approximately ₹13 lakh crores. This distribution marks the highest total income recommended for distribution thus far, signifying a noteworthy development for EPF members.