If you are a salaried individual and contribute to EPF scheme then you must be aware of the fact that that every month 12% of your “salary” is contributed towards EPF account. Your total monthly contribution is routed towards Employees’ Provident Fund.
Your employer also contributes 12% of the salary to your EPF a/c. But your employer’s monthly contribution is routed towards various components of PF.
Out of this 12% of your employer’s monthly contribution, 8.33% goes towards EPS (Employees Pension Scheme) and only 3.67% is invested in Employees’ Provident Fund (EPF). So, you contribute 12% of your basic salary and your employer contributes 3.6% of your basic salary towards EPF deposits.
In case, you switch your job, you have to transfer the Employees’ Provident Fund balance to the new employer (assuming they offer EPF scheme). But what happens to the funds in the EPS, continues to remain a mystery for many.
The main reason for this confusion is, while the PF account of the new employer shows the transferred EPF balance, the EPS money from the previous employer wont get reflected in new PF account passbook.
When you change jobs, the Employees’ Provident Fund (EPF) balance with the earlier employer gets transferred to the PF account with the new employer, but the Employees’ Pension Scheme (EPS) balance doesn’t. Why is that?
Earlier, when changing jobs, you were required to fill up two forms—Form 11 to declare that you are already part of Employees’ Provident Fund (EPF) schemes, and Form 13 for getting the PF balance transferred from the earlier organisation to the new one.
The EPFO has recently released a revised Form – 11. This new Composite Declaration Form-11 serves both purposes, provided you have an active Universal Account Number(UAN) and your Aadhaar is verified for KYC in the EPF database.
You can also transfer PF online through UAN member portal.
When the PF transfer request is completed, the passbook of your current PF account reflects a lump sum addition in the month of transfer, but the EPS column shows zero addition. Instead, the PF passbook of your previous organisation reflects the EPS amount.
While service details are transferred from an older to a new account, the EPS amount is retained in the older account. Transfer of service details helps keep a track of number of years of work a subscriber has put in. So if you are in your fourth job, and have consolidated your EPF in your new account, your EPS amount for the three earlier employers will reflect in the respective PF passbooks.
While service details are transferred from an older to a new account, the EPS amount is retained in the older account. The PF passbook of your previous organisation reflects the EPS amount and your current EPF account (under Service history tab of UAN portal) reflects the carried forward service period.
Below are the conditions for EPS withdrawals ;
(1) If you have worked for less than 10 years and have been unemployed for more than 2 months then you can withdraw entire EPS balance (through Form 10c) along with EPF balance (Form 19).
(2) If you have worked for more than 10 years then you can not withdraw full EPS balance. You can apply for Pension which starts either at 50 (early pension) or 58 years of your age.
(3) In case, you resign from a job and join a new employer who does not offer EPF scheme then you can either withdraw EPS balance (if service history is less than 10 years) or apply for Scheme Certificate from EPFO.
(a) You can submit this certificate when you join an EPF-covered organisation in future. If you do so, your service history gets carried forward.
(b) If you don’t join an organisation and reach 50 or 58 years of age, you can submit these certificates (if employed with multiple employers) to the EPF field office under whose jurisdiction your last employer was covered and apply (Form 10D)for monthly pension.
(4) In case, you resign from your current job and join a new organization where EPF scheme is offered, you can just submit Form-11 form to your new employer. Under this scenario, your EPF and EPS get transferred.
I hope you find this post informative. Kindly share your comments or queries if any.