EPFO Centralised Database To Be Ready In 2-3 Months: What Members Can Expect

The Employees’ Provident Fund Organisation (EPFO), one of the country’s largest social security schemes with some 29.88 crore members, has often faced public criticism for unnecessary delays in claim settlement or due to its high claim rejection rate. What makes it one of the largest retirement benefits platforms is that companies with 20 or more employees must mandatorily provide the EPF account to staff members under their payrolls. However, for some time, EPFO has been making the news headlines for all the wrong reasons. Data shows that of the 7.38 million claims in FY2022-23, EPFO rejected 2.49 million. Experts have blamed this high rejection rate on EPFO's complete shift to online claim settlement, which led to tremendous pressure on its old IT platform due to the high traffic volume. Also Read: What Are FM Sitharaman’s EPFO Incentives For Employees And Employers? Discrepancies in the online request forms and inadequate documents have also led to rejections. To handle these teething problems, EPFO has launched a drive to upgrade its digital infrastructure to meet the required standards to process the high claim volumes. It is also considering a centralised database, due in the next 2-3 months, to minimise the rejection rate. Sumita Dawra, secretary of the Labour and Employment Ministry that controls EPFO, quoted by Moneycontrol, said, “There is a need to upgrade EPFO’s IT systems, and they are in the process of doing it. Their IT systems should be on a par with the country’s best financial institutions.” Dawra also said that a centralised EPFO database will make the information retrieval faster. The database is expected to store all information, such as job changes, leaves, and those who rejoins the workforce. It will make the claim settlement process easy, convenient, and faster.

Recent Changes By EPFO 

EPFO has raised the auto-settlement limit for medical claims from Rs 50,000 to Rs 1 lakh. In May this year, it extended the auto-claim settlement facility for education, marriage, and house construction and renovation for members' flexibility and convenience. This reduced the settlement time from an average of 10 days to around three to four days. Also Read: Premature Withdrawal Of NBFC Deposits To Be Allowed From 2025: What You Need To Know It has also discontinued the requirement of uploading an image of a cheque leaf or attested bank passbook for claim settlement. Further, early this month, EPFO introduced guidelines to strengthen the security of an inoperative EPF account, besides specifying that an account will be termed as inoperative after the subscriber attains the age of 58. The latest EPFO data shows that its members have grown significantly. In May 2024, it saw a net addition of 19.50 lakh members, the highest since April 2018, when the first payroll data was published. However, to handle the large number of claims, it plans to create a centralised database to expedite and make the settlement process convenient for the members.