Two Ways EPFO Can Enhance Its Public Image 

Satendra Singh (Corporate & Labour Law Advisor)
India's state-run retirement fund could greatly improve its reputation by reducing claim rejections and expediting interest payments. Its digital revamp should signify efficiency.
The Employee Provident Fund Organisation (EPFO) is critical to India’s retirement security framework, yet it hasn’t always made a favourable impression on its subscribers in recent years. A significant issue has been its high rejection rate for final settlement claims. In 2022-23, EPFO rejected 34% of withdrawal applications, up from 13% in 2017-18, suggesting that more than a third of claims didn’t go through. This surge follows an increase in invalid claims after EPFO transitioned to online services. To enhance transparency, the EPFO should provide more detailed explanations on rejections, distinguishing clearly between genuine claims and procedural glitches like minor data mismatches that shouldn't raise red flags. Streamlined digital protocols could reduce these issues.
Beyond the user interface, what matters most is reliability. People depend on EPFO to protect their lifetime savings, and when they request these funds, they expect quick access. To make its digital transformation credible, EPFO must show improvements in efficiency. For instance, processing interest payments to subscribers on time is crucial, as many have waited months beyond the financial year-end to receive due interest.
The delay is partially attributed to inter-ministerial decision-making, as EPFO’s annual interest rate is based on surplus assessments requiring the finance ministry's approval. In past years, EPFO has occasionally proposed a lower rate to maintain a reserve buffer for future returns. Once the interest rate is approved, timely notification and crediting of interest are essential to avoid complications, especially for retirees withdrawing funds.
To address this, EPFO should establish a fixed date each year for interest credits, ensuring transparency and predictability. Although a slight delay does not impact the fund’s growth, it poses issues for subscribers who rely on these funds to file accurate tax returns. Additionally, with the government mandating employee contributions up to ₹2.5 lakh annually, accurate and prompt information is crucial to avoid taxpayer discrepancies.
As India’s primary retirement fund, serving a large segment of the organized workforce, EPFO must tackle inefficiencies like claim rejections and delayed payments. Ensuring accurate and prompt fund credits would reinforce EPFO's reputation as a trustworthy financial safety net, supporting workers' financial security after retirement.