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Hr NewsStatutory Compliance

The smoother and easier way of transferring EPF money

Source | LiveMint : By Deepti Bhaskaran

Universal Account Number (UAN) was launched by the Employees’ Provident Fund Organisation (EPFO) in 2014, to discourage early withdrawals and encourage people to transfer their EPF money while changing jobs, something the rule book says to do anyway. But the process of transfer has not been a smooth one. According to V.P. Joy, central provident fund commissioner, EPFO, the delay is primarily due to the multiple bank accounts held by regional provident offices. “Currently the transfer can take months because the money in the employees account has to be transferred from the bank account held by a regional provident fund commissioner’s (RPFC) office of the previous employer to the bank account held by the RPFC of the new employer,” he said. So, in order to reduce the turnaround time of such transfers, EPFO has decided to discontinue the practice of multiple bank account and keep just one. This is likely to get operational this week. “We have now abolished individual State Bank of India (SBI) receipt accounts and have only one bank account for the EPFO. The money is tagged to the employee’s UAN and as she changes jobs, only the account details get transferred to the new EPF office. There is no physical movement of EPF money,” he explained.

The second step that the EPFO plans to take to effect faster transfers is to do away with form-filling exercise that is needed to initiate a transfer.

“This facility will be applicable for those employees whose UAN is seeded with Aadhaar. Through this we should be able to cut the transfer time to about 5 days,” added Joy. The EPFO expects to launch auto-transfers in a month’s time.

So how will the two initiatives help? We explain but start with understanding the process that was prevalent till now.

The old system

When you move from one organization to another, you need to transfer your EPF account. For this you need to fill up two forms: Form 11 and Form 13.

Form 11 is a declaration form that is kept by the employer. It asks your details including details of your UAN, previous provident fund account number and the date of exit from previous employment.

Form 13 is the form in which you put your transfer request. You need to again fill up all your details along with provident fund details of the present and previous employers and submit it with the current employer.

The employer then sends this Form 13 to its regional provident fund office (RPF), which in turn sends it to the RPF of the previous employer. “The RPF of the previous employer, after verifying all the details with it, issues a cheque equal to the outstanding balance of the employee and then sends it to the new RPF. Once the cheque is realised, the money is transferred,” explained Joy.

Read On….

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