If you are a salaried employee with years of service in your bag or somebody who worked as one in the past, here is a question for you: have you claimed Employees’ Provident Fund (EPF) money from your previous employers?

In answering this there is a good chance you would suddenly remember that you forgot about that EPF account with your first employer or with the one you worked only for a few months.

“Many times people feel it’s a tedious job to withdraw EPF money. Also some employees who work for smaller duration in a company don’t want to take the trouble to withdraw smaller amounts," says Manikaran Singal, chief financial planner, Goodmoneying.com, a financial planning portal.

According to Amit Gopal, senior vice-president, India Life Capital Pvt. Ltd, an investment and legal consulting firm in retirement benefits, people forgetting their account is not a one off case.

“Around 50% of the employees opt for withdrawal while 25% opt for neither withdrawal nor transfer," says Gopal.

This data is sourced from around 100 companies that India Life consults.

Don’t delay now

Before you continue to let lethargy dictate your decision, here are two facts that you should know. First, your EPF account earns a tax-free and risk-free rate of interest that is also capable of giving you real returns—inflation-adjusted returns. And the fact that both you and your employer contributed to the EPF account, the money compounded over so many years means even a small corpus invested years ago would have become a sizeable kitty by now. Sample this: Ten years ago on a salary of say 20,000 per month you would have contributed 2,400 and your employer would have contributed 1,859 per month in your EPF account, 541 from the employer’s contribution would have gone towards Employees’ Pension Scheme. Suppose you contributed only for a year and changed jobs. Now ten years back in 2003-04, EPF gave a return of 9.5% which came down to 8.5% in 2005-06 and remained stagnant for nearly five years. For the purpose of calculation, let’s take a constant rate of 8.5%. In ten years compounding at a rate of 8.5%, your EPF money would have become about 1.19 lakh. And this money would come to you tax-free.

So why claim at all? Let the money sit into the account and earn interest. Here is the second fact, in order to discourage people from leaving inoperative accounts, in which contributions aren’t made anymore, Employees Provident Fund Office (EPFO) with effect from FY12 decided to stop paying interest on inoperative accounts that were more than three years old. This means in the example above you will lose out on interest after FY11.

It’s in your interest to either withdraw your money in case you are no longer a salaried person or unemployed or get your account transferred to the new employee.

Making withdrawals

To make withdrawals, you need to fill up the withdrawal form, also called Form 19. You can download this at www.epfindia.org.in and submit it with the previous employer.

Even if you don’t remember your EPF account number, your ex-employer will be able to help. “In such cases employees can approach the current human resource department requesting for help," says Gopal. But what happens in cases wherein the previous employer has shut shop? Or the exit was unceremonious enough that you don’t want to interact with the employer again? There is a way out. Fill up Form 19 and get it attested from the branch manager of your bank. “We will accept attestation by the branch manager of the bank to which the EPF money goes. Since we recognize employees through employers, in the absence of the employer we would need someone to verify the identity of the claimant. Once the banks attests the identity we will have details such as father’s name and date of birth to further authenticate the identity," says K.K. Jalan, central provident fund commissioner, EPFO. “PF officials prefer this type of attestation as bank manager attests the details if the bank account is active and running," adds Gopal.

Submit the form with the regional provident fund manager in which the employer maintains or maintained the account. If you have the account number then it’s easy to identify the regional fund manager. Log on to the EPF website and run an establishment search.

Transferring EPF

Mint Money, however, recommends you transfer that money to your current EPF account. That way you can build a decent retirement corpus to address your pension needs. And to make the process of EPF transfer smoother, EPFO launched its online transfer claim portal on 2 October. But in order to use the service at least one of the employers will need to have their digital signatures registered with the EPFO. The process is then simple, register yourself as a member, fill up the transfer form—Form 13—and submit it for attestation with the employer that has registered its digital signature. After your details are verified by your employer, EPFO will process your transfer. What online transfer will also bring is timely transfer. You need to remember that you may submit the transfer form with the employer, but your employer may not forward the form to the EPF office, but with the online process EPFO will know the form has been submitted with the employer for attestation. This introduces a greater level of accountability. In an interview to Mint Money, Jalan estimated a transfer time of three-four days with the online facility (the interview can be read here: http://goo.gl/MHdXwQ ). In case the employers have not registered their digital signatures, you can still transfer the money offline. Fill up the transfer claim form and submit with your current employer. Your employer’s regional provident fund office will get in touch with the provident fund office of your previous employer to initiate the transfer. In case the previous employer has shut shop you needn’t worry. “The present employer would have attested your identity so that the transfer can take place", explains Gopal. The days of administrative pangs in touching your EPF money are slowly fading away. EPFO is putting in place both punitive and conducive measures to encourage you to take your account with you when you change jobs. It’s in your interest to act now.

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