Crores of employees working in the private sector depend on the Employees' Provident Fund (EPF) for their retirement planning. This is a long-term savings scheme, in which 12% of the employee's basic salary and dearness allowance (DA) is deposited in the EPF account every month...

Crores of employees working in the private sector depend on the Employees' Provident Fund (EPF) for their retirement planning. This is a long-term savings scheme, in which 12% of the employee's basic salary and dearness allowance (DA) is deposited in the EPF account every month. Employers also contribute the same amount, out of which 8.33% goes to EPS (Employee Pension Scheme) and the rest goes to EPF.

For the financial year 2024-25, EPFO ​​has fixed the interest rate on EPF at 8.25%, which is higher than other savings options in the market like fixed deposits and PPF. This interest can convert into a large amount over the years through compounding, which provides financial security after retirement.

Why is it harmful to withdraw EPF immediately after changing jobs?

While changing jobs, many employees withdraw money from their old EPF account, which can prove to be a big mistake. There are two major disadvantages of doing this:

1. Loss of compounding: EPF is a long-term investment, and its growth over time increases exponentially due to compounding. Withdrawal breaks this cycle.
2. Tax hit: If you have contributed to EPF for less than five years and withdraw the money, TDS and income tax may be levied on it. This reduces your returns even further.

Transfer EPF, not withdraw

EPFO has made the process of EPF transfer digital and easy when changing jobs. Now you neither need to visit the old office nor do any lengthy paperwork.

How to transfer EPF? Easy step-by-step process:

1. Login to UAN portal:
   Visit the official website of EPFO ​​https://unifiedportal-mem.epfindia.gov.in and log in with your UAN (Universal Account Number) and password.
2. Click on One Member - One EPF Account:
   Under the "Online Services" tab, click on "One Member - One EPF Account (Transfer Request)".
3. Verify details:
   Your current and old employer details will appear on the screen. Verify it and select the employer through whom you want to attest the transfer (old or new employer).
4. Verify via OTP:
   Click on "Get OTP", and an OTP will be sent to your registered mobile number. Enter it and submit the form.
5. Download and submit Form 13:
   After submission, you can download Form 13. Print it, sign it if required and submit it to the employer.
6. Track status:
   You can track the status of the transfer by logging in to the portal or through SMS. Usually this process is completed in 2 to 3 weeks.

What things should one keep in mind?

• Transfer within 6 months: Experts suggest that EPF should be transferred within 6 months of joining a new job, so that there is no problem in the future.
• Keep salary slip and PF number safe: Keep a record of each month's salary slip and old PF number, so that there is no problem in the transfer process.
• Eligibility for EPS: If your basic salary is less than ₹15,000, you are also eligible for EPS, which provides a monthly pension after retirement.

Other facilities and benefits related to EPF

• Partial withdrawal facility in case of an emergency like COVID-19
• E-nomination option to transfer money to the nominee after death
• You can check the balance and status through SMS/UMANG App/EPFO Portal

 PC:Punjab Kesari