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Transferring or withdrawing your PF and Pension on changing jobs is a relic of our socialist past that we have to live with until the EPFO cleans up its act by moving to a unique PF account number system.
This blog post explains how to transfer or withdraw your PF and Pension funds when changing a job. But first, let’s start by understanding exactly what PF and Pension is.
What is PF and Pension?
Employees Provident Fund (called EPF or PF in short) and Employees Pension Scheme (or EPS or simply Pension) are mandatory savings schemes established by the Govt. where a certain portion of your salary gets deposited each month. This is to ensure a cushion of savings which can be used in hard times and a monthly income after retirement.
As per Govt. rules, 12% of your basic salary must go into your PF account each month. Likewise, the employer has to make an matching contribution of 12%. However, the employer contribution does not fully go into your PF account. It is split into two parts of 3.67% and 8.33% respectively – the former goes to your PF account and the latter to your Pension account (subject to a maximum of Rs. 541).
If your basic salary (not CTC) is Rs. 10,000 per month, an amount of Rs. 1,200 will be deposited from your salary to your PF account. Similarly, a matching amount of Rs. 1,200 will be deposited by your employer. Out of the employer contribution, Rs. 541 (maximum allowed) will go to your Pension account and the remaining Rs. 659 to your PF account.
Note that the employee and employer contributions are not deducted from your basic salary. They are over and above your basic salary, but included in your total salary (CTC).
Transfer or withdraw?
When you change jobs, you must transfer your accumulated PF and Pension funds from your existing accounts to new accounts created by your new employer. This you must do within 3 years of leaving your previous company, because after that the PF account will be marked as inactive and will stop earning any interest. You can apply for transfer as soon as you join your new company.
However, if you are no longer employed, you can opt to withdraw your PF and Pension funds, subject to the following caveats:
- You can only apply for PF withdrawal after a minimum of 60 days after leaving service. There is no maximum time limit, however.
- You are eligible to withdraw Pension only if you have worked for a minimum of 6 months in the previous establishment. Otherwise, the Pension contribution stands forfeited.
- Also, you have the option of withdrawing your Pension funds only if you have been working for 10 years or less. If you have been working for longer than that, you are instead eligible to receive a monthly Pension after the age of 50 or 58, and cannot withdraw it as a lumpsum.
Usually, transferring PF takes much longer than withdrawing it, which is why many people choose to withdraw their PF and Pension instead of transferring it. However, strictly speaking, withdrawing PF on changing jobs is illegal and you are liable to pay tax on it if caught. PF withdrawal is only permitted under certain circumstances, as outlined here: http://profit.ndtv.com/news/your-money/article-want-to-withdraw-from-your-epf-account-here-are-the-details-314635
Transferring PF and Pension from old company to new:
To transfer PF from previous company account to the new one, you need to fill Form 13 (revised).
Pension is transferred along with the PF itself. There is no separate form for Pension transfer.
To initiate the PF and Pension transfer, you must fill up Form 13 and submit it to the Finance Dept. of your present company, which will then forward the same either to your previous company and/or to their PF office for effecting the transfer (depending on whether your previous company maintained its own PF Trust or deposited PF with the EPFO).
Withdrawal of PF and Pension from old company:
To withdraw PF from previus company account after leaving service, you need to fill and submit Form 19. To withdraw Pension, you need to fill Form 10C.
To apply for withdrawal, you must fill and submit Form 19 and 10C directly to your previous employer, who will then sign on them and forward to the PF office for further action. Sometimes, you may need to submit the forms in the PF office personally, after getting your previous employer’s signatures. But don’t worry, there is usually no harassment here – just don’t forget to collect the receipt of submission for your reference.
Points to be noted:
1. You can download the forms specified above here: http://www.epfindia.com/downloads_forms.html
2. To fill up the various forms, you will need the following details:
- PF account number of old company (you will get this from your pay slip)
- Pension account number of old company (same as PF account number)
- Date of joining and leaving previous establishment
- Date of joining present establishment (in case of transfer)
- Bank account where you wish to receive the funds (in case of withdrawal)
- Name and address of the PF office to which your previous company was depositing PF (you can get it by entering your old PF account number here: http://search.epfoservices.in/est_search.php)
3. If applying for withdrawal, the following documents also need to be enclosed along with Form 19 and Form 10C:
- Form 3A from your previous employer. This document basically lists the details of contribution towards PF and Pension by the previous employer. This will be given by your previous employer and must be submitted in original with the application. It will be in this format: http://www.epfindia.com/Forms/Forms_Instructions/Form3A.PDF.
- Cancelled cheque leaf of your bank account in which you wish to receive the money.
4. There is no need to fill up the “Advance Stamped Receipt” section of Form 10C and Form 19, or attach any stamp of Re. 1/-.
5. Provide your mobile phone number and email ID on top of all the forms on the first page. This will allow the PF office to get in touch in case of any issues.
Check claim status:
You can check your claim status (transfer or withdrawal) here: http://www.epfindia.com/ClaimStatus_New.html
Select the state where your previous establishment is located, select the PF office applicable and enter your PF account number to retrieve the claim status.
If your PF or Pension transfer or withdrawal application is rejected, you will be sent a letter specifying the reason. However, this letter can take quite some time to arrive, and the URL for checking claim status does not specify the reason for rejection.
So, in the meanwhile, you can refer to this document to understand the common reasons for rejection: https://docs.google.com/open?id=0B3fAqJpOwcyxSksyeTNfci13LTA
In case of any grievances or lack of progress on your application, you can lodge a grievance online here: http://epfigms.gov.in/
However, grievance redressal through this mechanism takes a long time, and it is much quicker to get information by filing a RTI application instead.
The following links have useful information on how to file a RTI for getting status of PF claim:
- Facts about EPF and EPS: http://www.jagoinvestor.com/2012/05/epf-facts-employee-providend-fund.html
- EPF withdawal for personal reasons: http://profit.ndtv.com/news/your-money/article-want-to-withdraw-from-your-epf-account-here-are-the-details-314635
- EPF & Pension transfer/withdrawal forms: http://www.epfindia.com/downloads_forms.html
- Search PF office for your company: http://search.epfoservices.in/est_search.php
- PF transfer/withdrawal claim status: http://www.epfindia.com/ClaimStatus_New.html