Dear All, We would like to bring to your kind attention Circular No. Exem/32(18)/2016/Exemptions/14780 dated 13th October 2017 wherein any Unclaimed Provident Fund amount for a period of SEVEN YEARS from the date it becomes INOPERATIVE shall be transferred to Senior Citizen Welfare Fund.
Said rule is applicable for the funds being held by Office of EPFO as well as by Exempted Trust.
Rule 7(2) and 3(6) of the Senior Citizen Welfare Fund mandates that all such accounts shall be identified by 30th September every year and funds shall be transferred by 1st day of March every year.
Transfer of Funds to Senior Citizen Welfare Fund should be made on net basis namely the unclaimed deposits minus the settlements made.
Members can claim the money within 25 years from the date of credit of fund to the account of Senior Citizen Welfare Fund from the Office of EPFO or Exempted Trust. If no claim is made with in a period of 25 years than the amount shall escheat (transfers the property of a person who died without heirs to the crown or state) to the Central Government
All exempted establishments should keep the accounts and full employee wise details of each member whose amounts have been transferred to Senior Citizen Welfare Fund
Also the total year wise amount transferred to Senior Citizen Welfare Fund and fund lying unclaimed with the Government for less than 25 years should be reflected in Audited Balance Sheet.
We are further attaching our communication mail w.r.t amendment made in Para 72(6) of the EPF Act vide Gazette notification dated 11th November 2016 which details the amounts to be considered as unclaimed amount under the EPF Act
Provident Fund Amendment-Gazette Notification
Hi All,
We would like to bring your attention to Gazette Notification No. GSR 1065 (E) dated 11TH November 2016 amending sub paragraph (6) of Para 72 of The Employee Provident Fund Scheme 1952. Para 72 deals with the Payment of Provident fund and sub paragraph (6) deals with INOPERATIVE ACCOUNTS
Amended para 72(6) would be read as follows
AMENDED PARA 72 (6)
Any amount becoming due to a member as a result of:
(i) supplementary contribution from the employer in respect of leave wages/arrears of pay, instalment of arrear contribution received in respect of a member whose claim has been settled on account but which could not be remitted for want of latest address, or
(ii) accumulation in respect of any member who has either ceased to be employed retired from service after attaining age of fifty-five years or migrated abroad permanently or died, but no application for withdrawal under paragraph 69 and 70 or transfer, as the case may be has been preferred within a period of thirty six months from the date it becomes payable, or if any amount remitted to a person, is received back undelivered, and it is not claimed again within a period of three years from the date it becomes payable, shall be transferred to an account to be called the [Inoperative Account]:
Provided that in the case of a claim for the payment of the said balance, the amount shall be paid by debiting the [Inoperative Account].
“Provided further that if any amount becoming due to a member, as a result of supplementary contributions on account of litigation or default by the establishment or a claim which has been settled but is received back undelivered not attributable to the member, shall not be transferred to the
inoperative account.”.
Conclusion
- Now Provident Fund account ONLY for employees who have retired from services after attaining age of 55 years or migrated abroad permanently or dies will be transferred to Inoperative account after the expiry of 36 months. This implies that for all other set of employees’ amount standing to their credit will not be transferred to Inoperative account.
- This further implies that all such employees will keep on earning the interest till the time the time they retire or shifted abroad
- The said notification is effective dated 11th November 2016. QUESTION is what will happen to all such accounts which are in the category of Inoperative account as of 11th November 2016. Will all those accounts still remain in Inoperative category or will they also have to be moved to Operative category? Our interpretation is that all account which are INOPERATIVE as on the date of notification will still continue to remain in INOPERATIVE Category. We will still seek a clarification from Ministry of Labor and come back on the same. We will still advise that all Inoperative account as of 11th November 2016 shall be settled immediately
Thanks
