Citizens grapple with delay in PF settlement

The Employees’ Provident Fund Organisation (EPFO), India, claims it is one of the largest provident fund institutions in the world in terms of members and volume of financial transactions.

A recent news item revealed there were crores of unaccounted money lying with the EPFO. Various reasons could be attributed to this. Many keep changing jobs frequently and don’t claim the PF amount deducted from their salaries, as the sum would be less and thus, might not be worth the effort. At times, due to misunderstanding with the management, people quit jobs, and in such cases, even if they had worked for four or five years, it becomes difficult to get the PF money, as the management may refuse to sign or delay processing the application. Apart from this, there are instances of inordinate delay on the part of the PF office in dispensing the amount, be it settlement or dispersal of pension.

In fact, Clause 72 (7) of the Employees’ Provident Funds Scheme, 1952, specifies a unique provision casting responsibility on the Regional Provident Fund Commissioner concerned to settle claims (complete in all respects) within 30 days. If there is any deficiency in the claim, the same shall be recorded in writing and communicated to the applicant within 30 days from the date of receipt of such application. In case the Commissioner fails without sufficient cause to settle a claim complete in all respects within 30 days, the Commissioner shall be liable for the delay beyond the said period and penal interest at the rate of 12 per cent per annum may be charged on the benefit amount and the same may be deducted from the salary of the Commissioner.

Despite this, there are repeated complaints about the delay and it is a relief that a subscriber to a Provident Fund scheme has been held to be a consumer and the processing of his claim by the Regional Provident Fund Office to be a service within the meaning of the Consumer Protection Act, in furtherance to the landmark decision by the Supreme Court in Regional Provident Fund Commissioner Vs. Shiv Kumar Joshi in 1999.

Since then, numerous complaints have been heard and disposed of by consumer fora, and recently, in a complaint filed before the Himachal Pradesh State Consumer Disputes Redressal Commission, where, the complainant, who was contributing to the EPF was entitled to pension after retirement, did not get the amount for the period January to August 2008, in spite of repeated representations. The EPF contended that they had transferred the money to the bank where he had his pension account on August 28, 2008 and therefore, it was for the bank to disperse the amount of pension to him. However, the Commission observed that the delay of eight months could not be overlooked and ordered compensation of Rs. 1500 to be paid to the complainant.

The Employees Provident Fund Organisation appears to be taking steps to address the grievance of consumers, the most recent one being their newly launched portal Employees Provident Fund Internet Grievance Management System. However, it is vital that these proactive measures are effectively implemented.

(The writer works with CAG, which offers free advice on consumer complaints to its members. For membership details / queries contact 2491 4358 / 2446 0387 or


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