The retirement fund body in order that the main objective for the fund does not withers away and subscribes keep their savings in the account for retirement has made a call for automatic transfer of EPF account in case of job changes. The sole condition for the automatic transfer of EPF account to effect is the linking of Aadhaar with one's PF a/c.
As per a TOI report, the system shall be in place from next month and shall render the PF account more portable and provide added social security.
Expert cite that "Previously there were many issues while changing of jobs. An employee had to necessarily open a new PF account with the company. Then a transfer application had to be submitted to the new company to transfer the previous balance in the new account. This was a hassle and many employees used to avoid the process especially when job switching was more frequent. As a result either they used to withdrew the money from the old account or leave it as it is".
So, with the new system in place you shall be better off in these ways:
Ease of transfer of PF account - With this in place, now people will not unnecessarily close the PF account and withdraw the funds prematurely and instead will keep it until maturity for long-term goals or retirement needs as the otherwise cumbersome process of transfer of PF account to a new employer in case of a job change shall be made easy.
Aadhaar linking with PF account: The Aadhaar biometric Id has been made compulsory for opening the account as well as for the automatic transfer of PF account its linking with aadhaar is made mandatory. Further for the automatic transfer to happen, subscriber need not give any application.
Aid social security- As with the new ruling in place, people only under grave situations shall withdraw and close the account. The sole purpose of providing social security through these funds is likely to remain intact in near future.