Employees should transfer their dormant PF accounts

Employees should transfer their dormant PF accounts

MUMBAI: Anu, who had moved to Pune five years ago and had taken up a new job, was surprised to hear from an ex-colleague and friend, who reminded her to transfer her dormant employee provident fund (EPF) account to that maintained by the new employer.

Owing to an amendment, in effect from April 1, 2011, no interest is credited to an EPF a/c which is inoperative for more than 36 months. Earlier, even if an account was inactive, interest at the applicable rate accrued on the funds lying in such accounts; the prevailing rate of interest is 8.75%. Thus, Anu is definitely losing out by having a dormant account.

Employee Provident Fund Organization (EPFO) statistics show that Rs 27,000 crore is lying in inoperative accounts. The EPFO recently set up an online help desk to enable people to settle or transfer their dormant accounts. An Inoperative Account Helpdesk link is available at www.epfindia.com.

However, in addition to EPF accounts, managed by EPFO at regional levels, the government permits employers (exempt organizations) to establish and manage private EPF trusts, subject to conditions prescribed under the Employee''s Provident Funds and Miscellaneous Provisions Act, 1952 (PF Act). Here, the company sets up a board of trustees to manage and operate the trusts. EPFO''s helpdesk and online transfer facility doesn''t cover such private EPF Trusts.

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