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Monday, 13 August 2012 00:00
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Over Rs 22,500 cr of unclaimed EPFO balance show how impossible it is to
recover your money


Apart from the fact of subscribers under the New Pension Scheme (NPS)
getting higher returns than subscribers in the government-mandated
Employees Pension Fund Organization (EPFO), the latter have good reason for
another major grouse. According to a reply in Parliament, the EPFO had, in
2011-12, over Rs 22,600 crore of unclaimed subscriber funds in inoperative
accounts – given the EPFO's inability to get its accounts in order, even
this amount is provisional! Given the small size of the average EPFO
account, it's obvious this is not money rich subscribers have just
forgotten about; given how difficult it is to get money back, or
transferred from the EPFO, this is obviously money subscribers have had no
option but to leave behind. For year, subscribers have had no way of
knowing whether their accounts were being debited or credited – given EPFO
is the only organization in the world that still uses single-entry
book-keeping which prevents an audit trail from being formed, getting 24x7
information is even more important than in, say, banks or mutual funds. In
2006, EPFO promised to rectify this and said subscribers would get online
access to their accounts within a year, that a Unique Identification Number
would ensure accounts were portable and that balances could be paid out
within 3 days.

While that's not happened – as is evident from the large inoperative
accounts – what you have is an SMS-based know-your-balance service. While
that's a great start, in August 2012, the data being sent out is for March
2011! There is a beta version of a member portal with an online passbook,
but that's not functional despite being inaugurated with great fanfare. The
only saving grace is that, as compared to RBI which has said unclaimed
fixed deposits in banks (Rs 425 crore) can be appropriated by a depositor
education fund, the labour ministry has said the funds in the inoperative
accounts can't be transferred to anyone else. What good that does to
subscribers is not clear though.

 

 

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