Many employees are confused about whether the pension amount deducted from their salaries has been correctly deposited into the Employees’ Pension Scheme (EPS) account.
To clear this confusion, the Employees’ Provident Fund Organisation (EPFO) has issued a new circular.
The circular explains what will happen if an employer has mistakenly deposited the wrong amount into the EPS account. EPFO has assured employees that they will not face any financial loss due to such mistakes.
Common Mistakes Made by Employers
According to EPFO, companies have mainly made two types of errors in pension deposits:
Pension money was deposited into the EPS account for employees who were not eligible for the pension scheme.
Pension contributions were not deposited into the EPS account for eligible employees, and instead, the money went into the PF account.
What Happens If EPS Money Is Deposited Incorrectly?
EPFO has stated that if pension money has been deposited into the EPS account of an ineligible employee, the amount will be recalculated. The money, along with applicable interest, will be transferred to the correct PF account.
Additionally, any pension service period that was wrongly added will be removed from records to avoid future errors.
What If an Eligible Employee’s EPS Is Not Deposited?
If an eligible employee’s pension contribution was not deposited into the EPS account, EPFO will calculate the correct amount, including interest, and transfer it to the EPS account.
The employee’s pension service period will also be added. If there was any Non-Contributory Period (NCP) in between, it will be adjusted properly.
Should Employees Be Worried?
EPFO has clearly said that employees do not need to worry. These errors will not cause any financial loss to subscribers. All corrections will be done with interest, and pension records will be updated accurately.
