EPFO pension rules: What happens to your pension after death? Know family benefits

New Delhi: An employee member of the Employees' Provident Fund Organisation (EPFO) may enjoy retirement benefits which continue till death. The pension continues to be credited to the retiree's account even after his death if it is not reported and documents are not updated. Therefore, it is important for the family member to inform EPFO about beneficiary's demise.

Family members should not assume that they are automatically eligible for the pension after the beneficiary dies, as it is different from the family pension, which can be claimed from the EPFO.

If the family of the deceased does not report the death on time, the pension continues to be credited to the account and stops only when the required documents are submitted. However, the amount credited to the account after the pensioner's death does not belong to the family and is considered an overpayment. The pension is payable until the day of the person's death, and any amount credited beyond that is subject to recovery by the paying branch.

The bank obtains an undertaking from the pensioner at the time of the commencement of the pension regarding the recovery of any excess amount from the concerned account.

Once the concerned bank receives the pensioner's death certificate, it calculates the arrears due to the deceased and the excess payment made because of the delayed update. The arrears are payable to the nominee of the bank account or the legal heir if the deceased has not submitted any nomination.

The family is therefore responsible for submitting the beneficiary's death certificate, along with a written application, to the concerned EPFO branch and bank to ensure the timely closure of the pension account.

Family Pension

The family may claim the deceased's pension after informing the concerned EPFO branch about the demise and submitting the required documents. The spouse may then submit a family pension application to claim the benefits.

The paying bank is responsible for notifying the link branch, which then informs the Regional Office to initiate the payment of the family pension.

The payment to the spouse continues until death or remarriage. However, the amount is not the same as that received by the pensioner and is 50% of the pension amount.

Children of the deceased are also entitled to the pension until they turn 25 years of age. At a time, only two children are eligible. The amount credited for children is 25% of the pension payable to the widow for each.

In case both parents die, an orphan receives 75% of the pension payable to the spouse.

The age limit and the number of orphabs eligible for pension benefits remain the same as those applicable to children.

Also, Under EPS-95 a disabled child’s pension is paid for life, subject to applicable conditions.