EPFO ordered to pay 6% interest on delayed PF claim: What rules say on settlement timelines

The Employees’ Provident Fund Organisation (EPFO) has been directed to pay 6% annual interest to a retired employee after a consumer commission found that his provident fund claim of more than ₹14 lakh was not settled within the prescribed time, according to a PTI report.

The Mumbai Suburban District Consumer Disputes Redressal Commission held that the EPFO was deficient in service after it failed to establish that the employee’s original claim was incomplete. The commission said the claim should have been processed within the stipulated 20-day period under the Employees’ Provident Fund Scheme, 1952.

The employee, a former worker of Fleet Maritime Services (India) Pvt Ltd, had submitted his PF claim on October 19, 2016. According to the EPFO, the claim did not include a required joint declaration and was returned on November 7. The organisation said it received the complete documents on December 2 and settled the claim on December 14, within 20 days.

However, the commission noted that the EPFO did not produce a written rejection or deficiency communication to establish that the claim submitted on October 19 was incomplete.

The commission consequently treated the delay as a deficiency in service and directed the EPFO to pay 6% per annum interest on the ₹14,06,272 PF claim for the 35-day delay period from November 9 to December 13, 2016. The EPFO has been given 45 days to comply with the order.

What this means for EPFO members

The order highlights the importance of timely processing of PF claims and of maintaining records of claim submissions and any deficiency communications from the EPFO.

It also shows that where a claim is disputed as incomplete, the documentation surrounding the submission and any communication from the EPFO can become important if a member challenges a delay in settlement.-With PTI inputs