look news india
The biggest headache faced by most of the employees after changing jobs was to transfer money from their old Provident Fund (PF) account to the new account. Many times, PF transfer remained pending for months due to non-availability of attestation from the old company, technical difficulties in Form 13 or lack of coordination between the two companies. Employees Provident Fund Organization (EPFO) has eliminated this complex and tedious process under its new Centralized IT Enabled Services (CITES) system. Automatic PF Transfer (Auto Transfer) The system has been fully activated.
After the implementation of this new system, now any employee changing job will not need to make a separate online transfer claim or fill Form 13 to transfer the old PF balance to the new institution. As soon as the employee joins the new company and the first PF contribution is deposited from there, the backend system will automatically merge the deposits in the old account with the new member ID.
EPFO’s auto-transfer mechanism is completely based on Universal Account Number (UAN). When you leave your old company, your date of exit is recorded by the company on the EPFO portal. After this, when you join a new company and hand over your same old UAN number to the new employer, the new company links your new Member ID to the same UAN.
As soon as the new company deposits the PF contribution deducted from your first month’s salary into EPFO, an ‘auto-transfer trigger’ is automatically activated in the system. After this, the central server of EPFO credits both the employee and employer’s share of the previous account to the new account. Information about the start and completion of this process is sent to the registered mobile number of the member through SMS and email.
Although this feature is completely automatic, for it to work properly the following 4 conditions must be met in the member’s account:
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Activation of UAN and linking with Aadhaar: Your Universal Account Number (UAN) must be active and linked to your correct Aadhaar number.
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Full Digital KYC Verification: Aadhaar, PAN card (PAN) and bank account details (including IFSC code) in your UAN account must be completely updated and ‘digitally approved’ by the employer.
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Registration of ‘Date of Exit’ by the old company: After leaving the previous job, the date of your termination is required to be recorded in the EPFO records by that company. If the old company has not entered the exit date, the member can enter it himself by going to the unified portal and going to ‘Manage > Mark Exit’ option.
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Same Personal Details (Name & DOB Match): There should be no difference in the spelling of name, date of birth and father’s name in your Aadhar card, bank account and records of both the companies.
If any of these details are incomplete or incorrect, the auto-transfer may be blocked and the member will have to resort to the manual process.
EPFO has also clarified that this facility of auto-transfer is applicable only for those companies and establishments whose PF accounts are directly managed by EPFO (Unexempted Establishments).
If an employee works in a private trust or company which has its own independent Exempted PF Trust, then this auto-transfer rule will not be applicable to him. In such cases, the employee will have to complete the traditional process of manual transfer form through his trust or EPFO portal.
For professionals who change jobs frequently, the biggest advantage of auto-merging PF under the same UAN is to maintain continuity of service. As per the rules of Employee Pension Scheme (EPS-95), it is mandatory to complete minimum total service period of 10 years to get lifetime monthly pension after the age of 58 years. When all your previous accounts are linked to the new account on time, your old service period also gets added without any loss.
Additionally, if your total service period exceeds 5 years or more, the amount withdrawn from PF becomes completely tax-free. Auto-transfer makes it easy for you to keep track of your total years of service. Employees can easily check whether their old balance has been successfully linked to the new account by logging into their EPFO passbook portal and going to the ‘View Passbook’ and ‘Service History’ sections.