Inactive EPF account: What to do in case you have one?

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Inactive EPF account: What to do in case you have one?
Changing of jobs often results in inactive employee provident fund account as many of the employees do not bother to either redeem the balance amount from the previous PF account or transfer it to the new PF account opened with the new employer. And, an EPF account is considered to be a saving for one's retirement. As per the decision of the EPFO trustees on April 1, 2011 an EPF account that has remained inoperational for 36 months, shall not yield any returns.

An employee PF account turns inactive if the account is not credited for continuously 36 months. And there can be several reasons for the account's turning inactive
- Change of job with non-redemption of proceeds or transfer to the newly opened account is one major reason
- Winding up of the company also results in the EPF account turning dormant

Some other scenarios also result in the account turning dormant for instance, in the case when an individual leaves the country for employment in other nation.

What recourse is available for individuals with dormant EPF account?

If your EPF account has remained dormant for a while and you want to encash your EPF savings either by making the claim or want to transfer the amount to the new PF account, EPFO has simplified the process all the more through the newly introduced Online Transfer Claim Portal (OTCP). For effecting online transfer or withdrawal through OTCP click here.

Withdrawals from the EPF account can be made after some stipulated time period after leaving the job.

And for the same an employee has to fill in the requisite forms. Form 13- In case of transfer of PF account from one member to another and Form 19 - In case of withdrawal of PF balance amount on leaving service/ retirement/ termination.

Transfer process is completed in a month's time or so. However, in case the EPF account was inactive the same shall no longer be considered to be so. And, with the transfer, your savings will realize the benefit of compounding over time.

As, the EPF earns a substantial interest rate @ 8.5% ensure that your EPF account does not remain dormant and continues to earn returns for you. And for it, on changing jobs you need to transfer the EPF account with your old employer to the new one. Further, as per the notification of the government, inactive EPF account when linked with the operational account will continue to earn return.

Also, as inactive EPF account is more prone to be embezzled, it is always wise to either withdraw the amount or transfer the balance into the new EPF account. To the surprise of many, an hefty amount of approximately Rs. 20,000 crore is lying in inoperational EPF account.

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