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When changing jobs or taking a break in their career, most employees focus only on transferring or withdrawing their Provident Fund (PF) balance. It has now become very easy to check the status of PF passbook and file online claim by logging into the integrated portal of Employees Provident Fund Organization (EPFO), but in this entire process, more than 90 percent of the employed people completely ignore a very important document. The name of this document is ‘Scheme Certificate’.
According to experts in financial and pension matters, in the long run this one paper proves to be more valuable than your PF fund. If you are leaving your job, joining another company or for some reason taking a break from work for a few years, not obtaining a scheme certificate can put your old age pension at risk forever.
Under EPFO, every month 12 percent of your basic salary and dearness allowance (DA) is deducted in EPF, and the same amount is given by the employer (company). Out of this 12 percent contribution of the company 8.33 percent share in Employee Pension Scheme (EPS – Employee Pension Scheme, 1995) goes to EPF, while the remaining 3.67 percent is added to EPF.
Scheme Certificate is an official certificate issued by EPFO, which is obtained through Form 10C. This certificate is a permanent legal and certified record of how many years and months you have contributed to the EPS. In simple words, this is your Pensionable Service Period There is a passbook to keep it safe.
When you leave one company and go to another, your PF balance is usually transferred through an online portal. But in many cases—especially when the trusts of the previous and new companies are different, there is a service break, or you are not joining a new job immediately—the pension service record remains incomplete.
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Mandatory condition of 10 years for pension: According to EPS rules, to get lifetime monthly pension after the age of 58 years, it is mandatory for any employee to have a total service period of at least 10 years (120 months).
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Clubbing of service period: If you worked for 4 years in the first company and 6 years in the second, then transfer of pension records is necessary to link these two periods. The scheme certificate links the previous service with the new service.
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Avoiding losing records: If the company gets closed in between or its records mismatch on the EPFO portal, then the scheme certificate is the solid legal evidence you have on the basis of which EPFO cannot reject your old service.
On leaving the job under EPS rules, the rules completely change depending on the length of service:
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Service Less than 9.5 Years: If your total service is less than 9.5 years and you are unemployed, you have two options—either withdraw the pension money in lump sum by filling Form 10C, or obtain a ‘Scheme Certificate’. Experts advise that never withdraw the pension money midway, but take the scheme certificate so that whenever you get a new job in future, this period can be added to the next job and you can fulfill the eligibility of 10 years.
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Service 10 Years or More: If your total service has completed 10 years, then as per the rules you cannot withdraw money from EPS. In such a situation, taking scheme certificate mandatory by law It happens. This certificate guarantees that you will get a lifetime pension on completion of 50 or 58 years of age.
The scheme certificate is a big shield not only for the employee but also for his family.
If for some reason any untoward incident happens to the employee, then on having a valid scheme certificate, his dependent spouse (widow/widower pension) and two children (up to the age of 25 years) start getting family pension immediately. If the employee had withdrawn the pension money after leaving the job and had not added service in the new job, the family would have been completely deprived of this lifelong security cover.
The process to obtain the Scheme Certificate is completely streamlined and can be done both online and offline:
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Uses of Form 10C: Go to EPFO’s Integrated Member Services Portal (Member Portal).
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Online Claim: Click on ‘Claim (Form-31, 19, 10C & 10D)’ under the ‘Online Services’ tab.
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Selection of options: When selecting Form 10C, instead of selecting ‘Withdrawal Benefit’ ‘Scheme Certificate’ Select the option.
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Document: Submit canceled check, service history of your bank account and family/nominee details.
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Certificate receipt: After verification, the physical certificate is sent to your registered address by the concerned regional EPFO office or issued digitally from the portal.
While joining the new company, you only have to give the number and copy of this scheme certificate to the new HR, so that your old pension service gets directly linked to the new UAN account without any interruption.