Provident fund: A click away
Most people who have switched jobs, have one time or the other, faced the hurdle of recovering their employee's provident fund (EPF) contribution or having it transferred. Companies usually complete the exit settlement process within a month. However, beyond submitting the paperwork on time, EPF is not in their control. Both the withdrawal and the transfer of EPF can take months or, in certain circumstances, even years to complete.
Moreover, a lack of transparency in the system leaves a person groping for answers, with none forthcoming. There are over 50 million EPF subscribers in India currently and the Employees' Provident Fund Organisation (EPFO) realises the importance of initiating reforms to make the process more simplified and transparent as the number of subscribers will only grow in the future.
Online EPF transfer, withdrawal
The EPFO has announced an online withdrawal and transfer provision for EPF from July 1, 2013, with the aim to settle claims faster. EPFO is currently working on setting up a central clearance house, which will be operational from July 1. The current procedure for transfer or withdrawal of EPF involves the submission of a physical application while changing a job, which is lost in the system and cannot be tracked to know the status. To make the process smoother and efficient, EPF withdrawal and transfer will now be made online.
As per provisions of online EPF transfer and withdrawal, there will be a central clearance facility that will ensure speedy execution of transfers and withdrawals. Also, subscribers can now track the status of their application online.
Verification of the details of the PF account from the previous employers will be on the EPFO henceforth, unlike the current scenario where employees need to get their applications verified from the employer for claim settlement. The subscribers will be assigned a permanent EPF account number, which will be used to track their application and process their transfer, withdrawal and claim request.
How to register
The registration details have not been provided by EPFO and we can expect to get them after the launch. To register for an online EPF account, follow these steps: (a) Go to the EPFO's website: www.epfindia.com; (b) Fill in the following details: Personal
details, EPF account number, employer's EPF code.
How to make a request
Once you have registered on the EPFO website, enter your old and new employer's EPF code, along with other details related to your EPF account. On submitting these details, an MIS will be generated with the tracking code for locating the application status.
EPFO is also planning to assign a permanent EPF account number to all the employees by next year that will further simplify the process. Once the account number has been assigned, the old employer will simply deposit the balance amount in the employee's account and the employee can continue using the same account.
The greatest advantage of the online EPF transfer process is that employees need not run from pillar to post to get their application verified as the EPFO will do it directly. Once the online application is received, the request application for transfer will go to the old employer and EPFO. The EPFO department will then verify the details and contact the old and new employers for verification and complete the transfer.
It is expected that a strict deadline might be assigned to EPFO officials for completing the process. Also, since all your details will be available on your online account and application form, EPFO officials will only need to verify the application.
With the new upgraded system, EPFO hopes to reduce the number of withdrawal requests that people make to avoid going through the transfer hassle. In the past, EPFO had launched many provisions and facilities to improve the EPF procedure in India, but these were either unsuccessful or delayed. Hence, if you are waiting for the online process to be set up before applying for an account transfer or withdrawal, we would advise you to wait for a month or so till the system is firmly established and a few successful transactions have been executed to avoid getting embroiled in any new complications.
Benefits of online transfer
* The procedure will be faster since everything will be online
* The employee can track the status at every stage
* There will be proper records of the EPF account with the subscriber as well
* Less paperwork for the EPFO employees, leading to faster execution
* Subscribers will continue a single EPF account, which will earn them better interest on their investment
* Since the waiting period for the transfer will reduce, there will be very little loss of interest earned
* The writer is CEO, BankBazaar.com