 "Nominee")
Subscribers to Employees’ Provident Fund (EPF) have to nominate people who will get benefit on their death. This requirement is stipulated under paragraphs 33, 34, and 61 of the EPF Scheme, 1952. Nomination is also necessary when submitting online death claims (Forms 10-D, 20, and 5-IF). During an EPF member’s service, they can file and update e-nominations any number of times.
Nomination necessity
Nomination cannot be changed after the death of the EPF member. There were more than 14.5 million EPFO accounts as of March 2024, so it is crucial to name nominees who will to receive pension benefits.
Members can now update their nominations online through the EPF members’ portal.
Who can be a nominee
According to EPF guidelines, any member can name one or more family members as nominees. A member without a family can nominate anyone else but the nomination becomes void if the individual later acquires a family.
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What if there is no nominee?
If an EPF account holder passes away without a nominee, the funds are divided equally among immediate family members. “Family includes the spouse, children (married or unmarried), dependent parents, and the deceased son’s widow and children," said Parth Thakkar, Personal Finance Professional (PFP).
Nomination process
"In the event of the death of a member who has not made a nomination, or if the nominee lacks a legal title, the legal heirs must obtain a succession certificate to claim the amount standing to the deceased member’s credit. This involves filing a petition in a competent court, followed by a hearing where the court verifies the heirs' claims and issues the certificate," said Rohit Jain, managing partner at Singhania & Co.
What if the nomination covers only part of the amount
"The nominee can receive the money lying to the credit of the deceased person’s account and distribute it amongst the legal heirs or beneficiaries to the extent of the nomination. The legal heirs will need to obtain a legal heir certificate for the remainder," said Shraddha Gupta, partner at Accord Juris.
How are disputes among nominees resolved
"Impediments arise only on account of non-cooperation from nominees. If the nominee is the legal heir or beneficiary, disputes are rare. However, if nominees refuse to part with the money to the rightful owners, legal proceedings may be necessary," said Gupta.
How can conflicts be avoided
"The best solution to avoid conflicts arising from nominations and the transfer of the estate of a deceased is to execute a registered will with a clear bequest of the estate. In the absence of a Will, civil suits are the only recourse," said Gupta. "If there’s no legal heir, a court may step in to decide who gets the funds based on the evidence presented."
What happens without a will or nominee
"If there’s no will and no nominee or legal heir, the EPF amount might go to the Senior Citizen Welfare Fund after a period of inactivity. The EPFO has steps in place to locate the rightful owner or their heirs before transferring funds," Thakkar said.
How to submit EPF/EPS nomination online
To update your nominee online for your EPF account, you'll need:
An activated and Aadhaar-linked UAN
A mobile number linked with Aadhaar
An updated member profile with a photo and address
For your nominee:
A scanned photo
Aadhaar number
Bank account number
IFSC code
Address
Steps:
1. Visit the EPFO website > Services > For employees > click “Member UAN/Online Services”.
2. Log in with UAN and password.
3. Select ‘E-nomination’ under the Manage tab.
4. Click ‘Save’ on the Provide Details tab.
5. Click Yes to update the Family declaration.
6. Click family details to add more than one nominee.
7. Click nomination details to declare the total amount of share. Click on Save EPF nomination.
8. Click E-sign to generate OTP and submit it.
Note that after e-nomination, no further physical documents are required. Updating your nominee online is quick—just about 7 minutes. It’s a significant improvement from the old way of submitting Form 2 through your employer to the EPFO.
Does a will supersede nomination?
The money in a person’s bank account forms part of their estate, and the legal heirs or the beneficiaries under the will are the rightful owners, not the nominee. However, many people mistakenly believe the nominee has all rights over the property.
"The Supreme Court in Shakti Yezdani & Anr. v. Jayanand Jayant Salgaonkar & Anr in December 2023 clarified that a nominee is appointed to avoid confusion regarding legal formalities after the account holder’s death and to protect the nominated assets from litigation until the legal representatives take appropriate steps," said Gupta.
The advantage of having a nominee is that the bank will cooperate in handing over the money to the nominee, who can then distribute it among the legal heirs or beneficiaries without them needing to approach the court.
