Unlocking Invisible Coffers

There’s a lot of dormant money in the Indian system. Team Finapo-lis spoke to experts to understand how this money accumulates and how its owners can get access to the same. Here’s what we discovered:

- VijayKrishnan & Mandar M Bakre

EPF

All unclaimed amounts stay with the Employee Provident Fund Organisation’s (EPFO’s) corpus and cannot be confiscated or diverted. The government has no legal claim on this unclaimed corpus and cannot divert it for any other purpose as it has tried to do in the past few months. Raman Pandey, member of the EPFO’s Central Board of Trustees (CBT), told the Finapolis, “There is no question of any unclaimed PF amount. PF money is exclusively the employee’s. The government has no control over the money that lies with the EPFO corpus.” He also added that as on March 31, 2016, Rs 40,866.14 crore lies unclaimed with the EPFO. The body has also paid dues of up to Rs 5,000-6,000 crore from inoperative accounts, as per EPFO data.

However, things have been made easier by the EPFO board’s move to reverse a decision made in 2011 and pay interest on all dormant EPF accounts, which means that the amount (employee + employer’s contribution) amassed in your PF account(s) will continue to earn interest for ever, until you claim your entire EPF corpus at the time you retire. In case an employee dies, his nominees, or the legal heir can claim the amount by submitting Form 20 attested by the employer or any authorised person (Bank manager, gazetted officers, any member of the CBT or regional committees of the EPFO or a magistrate/ postmaster/ sub postmaster/ president of village panchayat).