The Employee Provident Fund Office or EPFO has been in the news for all wrong reasons of late. And, if you read the article published in The Economic Times today, you will know why. According to the paper, EPFO wants you to refund excess interest it paid you, if you are some one who either transferred or closed your old PF account in the last two years.
The story so far: In the January of 2011, EPFO had issued a notification under which it said that anyone who keeps their EPFO account (for instance, due to change of job) dormant for more than three years, EPFO would stop paying interest on such accounts for April 2011. According to a report published in The Times of India on February 21, 2011; The EPFO will be changing its computer system so that interest will automatically stop if there is no contribution in an individual account for a period of 36 months. Read story here.
But in by November 2012, EPFO came out with another guideline where it said that EPF accounts will earn interest retrospectively if subscribers integrate their inoperative accounts with the operative ones. This was reported in Mint newspaper, read here.
What’s in the news today: According to The Economic Times, if you have closed or transferred your old provident fund accounts to your present employer in the last couple of years, you might receive a demand notice from the PF office asking you to refund a part of such retirement savings. Read here.
The EPFO is now getting in touch with present employers of such PF members and asking for refunds, as wrongful credits of excess interest were made to such member on their past PF balances. The organisation is saying that it inadvertently did not consider own circular issued in January 2011, and hence is asking for the return of the interest amount it paid by mistake. The report also said that while some member were receiving notice for EPFO via their employers, other were denied interest dues for period after April, 2011.
What will happen: Looks like there is simply no clarity on this issue as of now. What will happen in this regards only time will tell. But one thing we are sure of, don’t let EPFO be your only retirement plan. Do consider Public Provident Fund and other retirement investment options out in the market. Gone are the days where EPF was enough to fulfill your primary retirement needs.