The Employees’ Provident Fund Organisation (EPFO), the world's largest retirement fund body, has made significant strides in improving the pace of claim settlements, thanks to a major software upgrade. This upgrade has resulted in a 30% faster processing rate year-on-year in August-September, 2024.
For years, EPFO subscribers faced delays in claim settlements, especially when seeking premature withdrawals during financial emergencies. However, the recent advancements in the digital platform have considerably eased this issue.
According to a senior official from EPFO, “The upgradation of the software was completed six weeks ago. During peak hours, we’re seeing processing of claims have now doubled (as against a few months ago).” The official further added that EPFO is on the verge of upgrading its hardware and further enhancing its software to maintain and even improve this efficiency in the future.
The new software, developed by the Centre for Development of Advanced Computing (C-DAC) under the Ministry of Electronics and Information Technology (MeitY), is already proving beneficial. It has been instrumental in reducing the rejection rate of claims, which has been a persistent issue for the retirement fund body.
In recent years, the rejection rates for Employees' Provident Fund (EPF) final settlements surged dramatically. Official data shows that the rejection rate jumped from 13% in 2017-18 to nearly 34% in 2022-23. However, after the software upgrade, the rejection rates have seen a significant reduction.
Among the three main PF claim categories – final settlement, transfer, and withdrawal – the final settlement claims witnessed the highest rejection rate over the last five years. In 2022-23, the EPFO handled a total of 52.1 million claims, comprising final PF settlement, transfer claims, and withdrawal claims. Out of this, 13.4 million claims (25.8%) were rejected, while 37.7 million claims (72.4%) were successfully settled.
The primary reasons for the rise in rejections included discrepancies in data provided by claimants and those present in the EPFO system, along with technical glitches in the IT infrastructure. A senior official stated, "Rejection (of claims) occurs when members’ details are not matched with the system, and they don’t act in the prescribed manner.” However, with the recent software improvements, these issues are being addressed effectively, ensuring a smoother and faster claim settlement process.
The government is also working on creating a centralized database for a centralized payment system under the EPFO. This initiative is expected to be operational within the next two months. The database will maintain subscriber records in a single location, even if individuals move to different regions or change their employment, which will simplify and accelerate the claim process.
In its ongoing efforts to streamline processes, the EPFO has relaxed the mandatory requirement of uploading images of a cheque leaf or attested bank passbook for certain eligible cases. This change, introduced in the first 100 days of the Narendra Modi-led NDA government, is expected to promote ease of living and expedite online claim settlements.
An official release stated, “This will ensure faster settlement of claims filed online thus promoting ease of living, and reduce instances of rejection of claims due to non-uploading of the image of cheque leaf/attested bank passbook." Previously, over 10% of partial withdrawal claims were rejected due to the non-submission of these documents.
The Employees' Provident Fund Organisation (EPFO) has made remarkable progress in enhancing the speed and efficiency of its claim settlement process. With the successful implementation of a new software system developed by C-DAC, claim processing speeds have increased by 30%, and rejection rates have dropped significantly. These improvements are addressing long-standing issues that EPFO subscribers faced, especially during financial emergencies.
Furthermore, with plans to upgrade hardware and introduce a centralized database, the EPFO is poised to further streamline operations and ensure even smoother claim settlements in the future.
The government's proactive measures, such as relaxing certain documentation requirements, have also contributed to promoting ease of living for subscribers. As the EPFO continues to modernize its infrastructure, subscribers can expect quicker and more reliable access to their funds, fostering a better user experience.