The Employees’ Provident Fund Organisation (EPFO) is set to revolutionize its claim settlement process, bringing significant benefits to over 75 million members. The Ministry of Labour and Employment has initiated a strategic move to automate and expedite claim settlements, aiming to reduce manual interventions and minimize rejections.
Key Highlights of the Initiative:
- Formation of a Specialized Committee: A five-member committee, led by Financial Advisor G Madhumita Das, has been established to develop a seamless automatic claim settlement process. The committee is expected to present its recommendations by mid-next month.
- Expansion of Automatic Settlement Limits: EPFO currently allows automatic settlement of partial withdrawals up to ₹1 lakh for purposes such as housing, education, and marriage. This is an increase from the previous limit of ₹50,000 for medical expenses.
- Inclusion of Pension Claims: Automatic settlement is now available for all pension claims under the Employees’ Pension Scheme (EPS) or provident fund, subject to application validation.
Current Challenges:
- High Rejection Rates: Internal assessments reveal that over 60% of claims are rejected due to validation issues, necessitating manual processing and extending settlement timelines.
- Multiple Validation Checks: Presently, applications undergo 27 back-end validation checks before processing, contributing to delays.
Proposed Solutions:
- Streamlining Validation Processes: The committee aims to eliminate unnecessary validations to reduce rejection rates and enhance efficiency.
- Leveraging Technology: By adopting advanced technological solutions, EPFO plans to create a more user-friendly and efficient claim settlement system.
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Impact on Subscribers:
- Faster Settlements: With reduced manual processing, subscribers can expect quicker access to their funds.
- Improved User Experience: A seamless process will enhance satisfaction and trust in the EPFO system.
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Recent Performance Metrics:
- In the fiscal year 2023-24, EPFO processed 44.5 million claims.
- Settlement Timelines:
- 13.9 million claims settled within 3 days.
- 14.3 million within 10 days.
- 14.5 million within 20 days.
- 1.8 million took over 20 days.
- Types of Claims Settled:
- 40.9 million provident fund (PF) claims, including final settlements, advances, and partial withdrawals.
- 3.45 million pension-related claims and benefits.
- 75,000 insurance claims under the Employees’ Deposit Linked Insurance Scheme (EDLI).
Looking Ahead:
The EPFO’s initiative to automate and expedite claim settlements marks a significant step towards enhancing service delivery for its members. By addressing current challenges and leveraging technology, the organization is poised to provide a more efficient and user-friendly experience for all subscribers.
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