If you are a salaried employee, you are most likely making contribution to EPF (Employees' Provident Fund) as part of your monthly remuneration from your employer. This retirement savings fund like all investments require the subscriber to provide a nominee at the time of registration. The nominees are the ones that receive these accumulated funds in case of the unfortunate event of the subscriber's death.
If you are an EPF member, you are also an EPS (Employees' Pension Scheme) member by default.
Did you know that while the whole of 12 percent of salary contributed by employee goes towards EPF, the employer's part of the contribution is 8.33 percent towards EPS, 3.67 percent on EPF and a small 0.5 percent on Employees' Deposit Linked Insurance Scheme?
On the first day of the employment, the Human Resource Department/ Finance Department will hand you a form to register with the Provident Fund Scheme. You are required to nominate someone on the form as part of the registration to receive the funds on the event of your death.
As per EPFO rules, for EPF, the nominee has to be a family member. This is defined as:
- children (whether married or unmarried)
- dependent parents (includes husband's dependent parents in case of a woman)
- son's widow and children
When do nominations become invalid?
Marriage is a significant event in one's life. It holds true to one's investments as well. If you are unmarried, you are likely to nominate your parents towards the scheme. If the salaried person does not have a family member as defined by EPFO rules, he/she can nominate someone else.
If you have nominated your parent or someone else, your nomination will become automatically invalid when you get married, as if you had never made a nomination. You will be required to make fresh nominations to include your spouse.
If you had nominated someone other than a family member (as defined above), that nomination also becomes invalid after marriage.
How to make fresh nominations?
Since your nominations will become invalid after marriage, you can make fresh nominations online over EPFO's e-sewa portal, if your Aadhaar is linked with your UAN.
For EPF, you are allowed to include your dependent parents (or in-laws in the case of a woman) along with your spouse and children in the nomination.
For the pension scheme, one can only nominate spouse and children after marriage.
If you wish to not nominate or exclude your spouse or a single parent from the nomination, you will be required to seek special permission from an EPFO commissioner to do so.
What if you forget to make fresh nominations after marriage?
If the subscribe forgets to nominate anyone, his/her accumulated fund shall be divided equally among all nominees as defined by the rules.
In case of a divorce or absence of children or death of spouse or if the subscriber was unmarried, the money will go to dependent parents.
Sons who have attained majority and married daughters whose husbands are alive will not receive a share.