EPF
or Employees’ Provident Fund scheme is one of the most popular retirement
savings schemes. It allows an employee to contribute some amount to his/her EPF
account and build a large corpus for retirement. The employee’s EPF account
also gets contributions from the employer. The invested amount also accrues
interest over time and helps in building a substantial corpus that can be used
for better retirement planning.
Nowadays,
one of the most necessary elements in an EPF account is the nominee. In the
unfortunate case of the death of the EPF account holder, it is the nominee who
gets the entire accumulated corpus along with other benefits. Thereby, it is
necessary to add a nominee to your EPF account.
Did you know that
when
you get married your EPF and EPS nominations become invalid? As per the rules
of the Employees' Provident Fund (EPF) Scheme, 1952, any nomination made by you for
your EPF and EPS accounts automatically becomes invalid when you get married
and you are required to make a fresh nomination.
Puneet
Gupta, Director, People Advisory Services, EY India says, "As per the
Provident Fund Scheme, a fresh nomination is required by the member on his /
her marriage and any nomination made before marriage shall be deemed to be
invalid. This means that if you have joined the EPF and EPS before your
marriage then post your marriage you will have to make a fresh nomination as
the previous nomination made will be considered invalid, i.e., as if you have
never made the nomination."
Saraswathi
Kasturirangan, Partner, Deloitte India says, "The nomination in EPF and
EPS made prior to marriage automatically stands cancelled after marriage. As
per the rules of the EPF scheme, an EPFO member is required to do fresh
nomination after marriage."
Rules of nomination in EPF and EPS account
As per the EPF Act, only defined family members can
be nominated in an EPF account. Ms. Kasturirangan says, "Under the EPF
Act- (i) in the case of a male member ''family'' means his wife, his children
(whether married or unmarried), his dependent parents and his deceased son's
widow and children and
ii) In the case of a female
member, "family" means - her husband, her children (whether married
or unmarried), her dependant parents, her husband's dependent parents and her
deceased son's widow and children."
However, the rules of nomination for EPF and EPS
are different. Gupta says, "Family, in respect of whom nomination may be
made, is defined differently for the purpose of Provident Fund Scheme and
Pension Scheme. In the case of EPF, a member has an option to nominate even
his/her parents, apart from spouse and children. However, in the case of EPS, a
member can nominate only his spouse and children."
Gupta
says, "After marriage, you can still nominate your parents (irrespective
of your gender) or any other family member as defined in the law in your EPF
account. However, for your pension scheme account, you can only nominate your
spouse and children after your marriage."
What if you don't have a defined 'family member'?
As per the rules, if the EPF member does not
have any family member as defined above, then he/she can nominate any other
person but the nomination will become invalid when the person acquires a
family, as per the law.
Gupta
says, "Where an employee has no family (as prescribed under the rules), a
nomination may be made in favour of anyone. However, once an employee is
married or has a family, fresh nomination in favour of one or more family
members is required as the previous one stands cancelled."
Ms
Kasturirangan says, "A person can nominate his family members for
receiving the benefits under the EPF and EPS scheme. A member who is not
married or who does not have any living spouse and/or an eligible child may
nominate a person to receive benefits as provided under the scheme. However, in
the event of his/her acquiring a family (as mentioned in the rules), the
nomination made earlier will become void and a fresh nomination will be
required under both the schemes, i.e., EPF and EPS."
The
member is required to make nominations using Form 2. Recently, EPFO (Employees'
Provident Fund Organisation) has launched the e-nomination facility on the
member sewa portal. EPF members whose account is Aadhaar-linked and verified
can use the facility to make fresh nominations.
What if
you forgot to do the nomination after marriage and pass away due to an unexpected
event?
Ms Kasturirangan says, "Under the EPF
scheme, if no nomination exists, the entire sum will become payable to the
members of the family (as prescribed in the EPF Act) in equal shares, however,
no share shall be payable to sons who have attained majority, married daughters
whose husband are alive. In case of EPS if the person is unmarried, then
pension will be payable to dependent father/mother."
What if I wish to nominate a non-family member?
"Ideally, a family member as prescribed
under the law should be nominated in the EPF and EPS accounts. If you want to
exclude a family member like your husband or father from the definition of
family, you can write to the EPFO commissioner in case of EPF. From a
practical perspective, one could try approaching the EPFO commissioner if there
are challenges in nomination. Similarly, in case of separation or those who do
not have children and the spouse has passed away, the pension will be paid to
dependent father/mother," adds Ms Kasturirangan.
Steps
to add e-nomination in EPF
Follow the below-mentioned steps to
complete the process of e-nomination:
Step 1: Visit the official website of EPFO. You can directly land of the official website by clicking on this https://www.epfindia.gov.in/site_en/For_Employees.php
Step 2: Go to the ‘Services’ section under the
‘Service’ tab.
Step 3: Go to the ‘For Employees’ section under the ‘Service’ tab.
Step 4: Click on ‘Member UAN/Online Service’ and log in
with your UAN and Password.
Step 5: After signing in, a screen will popup, now click on ‘File
Now’ and log in with your UAN and Password or
Step 6: A ‘Provide Details’ tab will appear on the screen. Click on ‘Save’ to proceed further.
Following details are required of the nominee -
1. Aadhar card no
2. Name
3. Date of Birth
4. Gander
5. Relation
6. Address
7. Bank account details (IFSC Code & Account no)
8. Photo.
Step 7: Select ‘Add family Details’. You can add multiple
nominees under this
Step 8: Click on 'Nomination Details' and enter details
like the number of shares to be nominated under the name of the new nominee.
Save the details to proceed to the next step.
NOW SAVE THE EPF & EPS DETAILS.
Please note: The name of the last nominee mentioned in the latest e-nomination filing for the EPF account will be considered as the final nominee. This means that the earlier PF nomination will get canceled once the new nomination is added.
Adding e-nomination to your EPF account is extremely important. It helps you to safeguard your saved money and make sure that the nominee gets the full amount in case of your unfortunate death. With the option to file an e-nomination online, you can easily add a nominee to your EPF account without any hassle.
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