Friends,
Please find attached the notification dated 11.11.2016 amending para 72(6) of the EPF Scheme. According to the update, unclaimed PF amounts will now be transferred to an inoperative account only after retirement from service, upon reaching the age of 55, or after permanently migrating abroad.
Thanks
From India, Malappuram
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1446Please find attached the notification dated 11.11.2016 amending para 72(6) of the EPF Scheme. According to the update, unclaimed PF amounts will now be transferred to an inoperative account only after retirement from service, upon reaching the age of 55, or after permanently migrating abroad.
Thanks
From India, Malappuram
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Thanks sir for your information. it means if employee is retired or went abroad and he hasnt claimed pf accumulation more than 3 years will not get interest. Thanks
From India, Rajkot
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From India, Rajkot
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Dear Sir, According to the notification, all the members will get interest from 11-11-2016 except who has retired or migrated but not withdrawn the PF amount. Thanks, Vidyadhar Bhat
From India, Pune
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From India, Pune
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What happens when someone retires at the age of 60 years and does not withdraw his PF for next two to three years. Will his PF get interest in this period?
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Dear Sir, What happens If someone resigns the job and not working anywhere any job and doesn’t withdraw his PF amount for tow or threee years. will he get his PF interest in this period?
From India, Hyderabad
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From India, Hyderabad
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As per this notification, EPF account becomes Inoperative Account (i.e. interest need not be credited to members account post 36 months) only in the event of any of the below conditions:
1) On retirement any time after member attains the age of 55 years; or
2) Migrates permanently abroad; or
3) On death of the member
The period of 36 months would start from the above date.
In all other cases the PF account will remain active (in spite of no contribution) and interest needs to be calculated and credited to member’s account on monthly running balance.
From India, Mumbai
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1) On retirement any time after member attains the age of 55 years; or
2) Migrates permanently abroad; or
3) On death of the member
The period of 36 months would start from the above date.
In all other cases the PF account will remain active (in spite of no contribution) and interest needs to be calculated and credited to member’s account on monthly running balance.
From India, Mumbai
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Dear Mr. P.C. Agarwal,
Thank you for your valuable update on the EPF account transfer to an inoperative account by the department.
I would like to seek clarification on the following situation:
A person retired in October 2014 after working for a period of 22.5 years and has not yet applied for EPF withdrawal or pension. It was advised that the EPF department would provide up-to-date interest for three years after retirement, following which the account would be declared inoperative.
In accordance with this advice, the retired employee has not yet applied for withdrawal or pension and intends to do so before the completion of three years after retirement to cover expenses for their children's marriage. I seek your guidance on whether this approach is appropriate or if there may be any potential issues. However, upon logging into the UAN, it is noted that the EPF department has been updating the interest for the past two years or so after retirement.
Kindly advise on how to proceed with the withdrawal process. Specifically, whether it is advisable to wait for the full three years after retirement.
I eagerly await your valuable response.
With Kind Regards,
K. Bhatia
Email: kharapora@gmail.com
From India, Chennai
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Thank you for your valuable update on the EPF account transfer to an inoperative account by the department.
I would like to seek clarification on the following situation:
A person retired in October 2014 after working for a period of 22.5 years and has not yet applied for EPF withdrawal or pension. It was advised that the EPF department would provide up-to-date interest for three years after retirement, following which the account would be declared inoperative.
In accordance with this advice, the retired employee has not yet applied for withdrawal or pension and intends to do so before the completion of three years after retirement to cover expenses for their children's marriage. I seek your guidance on whether this approach is appropriate or if there may be any potential issues. However, upon logging into the UAN, it is noted that the EPF department has been updating the interest for the past two years or so after retirement.
Kindly advise on how to proceed with the withdrawal process. Specifically, whether it is advisable to wait for the full three years after retirement.
I eagerly await your valuable response.
With Kind Regards,
K. Bhatia
Email: kharapora@gmail.com
From India, Chennai
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Dear All,
The retirement age will be defined as per the Company policy. If the Company/Establishment decides the retirement age as 60 years, the member will receive interest up to 63 years, and later, the account will become inoperative. From the date of the member's death, if the amount is not withdrawn by the nominee, the account will accrue interest for the next three years from the date of death. Similarly, if the member migrates out of India and does not withdraw the PF amount, the account will accrue interest for three years from the date of migration.
Accordingly, the establishment will need to register the retirement age with the RPFC. If the establishment's retirement age is below 55 years, interest will be paid up to 55 + 3 = 58 years.
Thanks,
Vidyadhar Bhat
From India, Pune
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The retirement age will be defined as per the Company policy. If the Company/Establishment decides the retirement age as 60 years, the member will receive interest up to 63 years, and later, the account will become inoperative. From the date of the member's death, if the amount is not withdrawn by the nominee, the account will accrue interest for the next three years from the date of death. Similarly, if the member migrates out of India and does not withdraw the PF amount, the account will accrue interest for three years from the date of migration.
Accordingly, the establishment will need to register the retirement age with the RPFC. If the establishment's retirement age is below 55 years, interest will be paid up to 55 + 3 = 58 years.
Thanks,
Vidyadhar Bhat
From India, Pune
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Dear Senior,
I have following queries regarding this notification.
Dear All,
We have received the Notification regarding the interest on in-operative account. we have studied the same and we have followings queries regarding the same. on confirmation/clarification on the same we finalise the changes.
1) if the normal Retirement age is 58/60 and if employee leaves the organization after 55 year age and before retirement age it will be treated as resignation or not? interest will be credited to his account or not.
2) if employees becomes in operative between April-16 to October 2016(as on 1st November). will interest will be credited to such accounts from April-16 or from Nov-16?
3) in case of Voluntary retirement before 55 Years and after 55 years.
4) if any arrears dues or Contribution comes after the settlement and does not claimed by member fore more than 36 months. will it get interest or not?
5) Applicability of interest on erstwhile inoperative accounts from 11.11.2016 or the Accounts which are in the process of becoming Inoperative w.e.f.November 2016 will have to be given interest and not to be transferred to Inoperative Account and the Account which have already become Inoperative will remain Inoperative only.?
From India, Rajkot
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I have following queries regarding this notification.
Dear All,
We have received the Notification regarding the interest on in-operative account. we have studied the same and we have followings queries regarding the same. on confirmation/clarification on the same we finalise the changes.
1) if the normal Retirement age is 58/60 and if employee leaves the organization after 55 year age and before retirement age it will be treated as resignation or not? interest will be credited to his account or not.
2) if employees becomes in operative between April-16 to October 2016(as on 1st November). will interest will be credited to such accounts from April-16 or from Nov-16?
3) in case of Voluntary retirement before 55 Years and after 55 years.
4) if any arrears dues or Contribution comes after the settlement and does not claimed by member fore more than 36 months. will it get interest or not?
5) Applicability of interest on erstwhile inoperative accounts from 11.11.2016 or the Accounts which are in the process of becoming Inoperative w.e.f.November 2016 will have to be given interest and not to be transferred to Inoperative Account and the Account which have already become Inoperative will remain Inoperative only.?
From India, Rajkot
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The answers to your queries are as follows:
1) If the normal retirement age is 58/60 and an employee leaves the organization after reaching 55 years of age but before the retirement age, will it be treated as resignation or not? Will interest be credited to his account or not?
Ans: It will be treated as resignation. If the PF amount is not withdrawn, the employee is entitled to interest up to 61/63 years.
2) If an employee becomes inoperative between April 2016 and October 2016 (as of 1st November), will interest be credited to such accounts from April 2016 or from November 2016?
Ans: The member is entitled to interest from November 2016 onwards.
3) In the case of voluntary retirement before 55 years and after 55 years.
Ans: If the PF amount is not withdrawn, the employee is entitled to interest up to 61/63 years.
4) If any arrears dues or contributions come after the settlement and are not claimed by the member for more than 36 months, will it accrue interest or not?
Ans: The treatment will be as per the retirement date of 58/60.
5) Regarding the applicability of interest on erstwhile inoperative accounts from 11.11.2016 or on the accounts in the process of becoming inoperative from November 2016, will they receive interest and not be transferred to an inoperative account? Will the accounts that have already become inoperative remain so?
Ans: As per the notification, if the member has already retired for more than 3 years, the account will be treated as inoperative and continued. No inoperative account will be created beyond the retirement age plus 3 years.
Vidyadhar Bhat
From India, Pune
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1) If the normal retirement age is 58/60 and an employee leaves the organization after reaching 55 years of age but before the retirement age, will it be treated as resignation or not? Will interest be credited to his account or not?
Ans: It will be treated as resignation. If the PF amount is not withdrawn, the employee is entitled to interest up to 61/63 years.
2) If an employee becomes inoperative between April 2016 and October 2016 (as of 1st November), will interest be credited to such accounts from April 2016 or from November 2016?
Ans: The member is entitled to interest from November 2016 onwards.
3) In the case of voluntary retirement before 55 years and after 55 years.
Ans: If the PF amount is not withdrawn, the employee is entitled to interest up to 61/63 years.
4) If any arrears dues or contributions come after the settlement and are not claimed by the member for more than 36 months, will it accrue interest or not?
Ans: The treatment will be as per the retirement date of 58/60.
5) Regarding the applicability of interest on erstwhile inoperative accounts from 11.11.2016 or on the accounts in the process of becoming inoperative from November 2016, will they receive interest and not be transferred to an inoperative account? Will the accounts that have already become inoperative remain so?
Ans: As per the notification, if the member has already retired for more than 3 years, the account will be treated as inoperative and continued. No inoperative account will be created beyond the retirement age plus 3 years.
Vidyadhar Bhat
From India, Pune
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Dear All,
I came to know that if an employee resigns or leaves for any reason other than death or going abroad permanently at age 50, and as per company policy, the retirement age is 60, in this case, if the employee continues to earn interest until the age of 63 but has not yet claimed the amount, will the account become inoperative?
Is this interpretation correct?
Sahdev
From India, Rajkot
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I came to know that if an employee resigns or leaves for any reason other than death or going abroad permanently at age 50, and as per company policy, the retirement age is 60, in this case, if the employee continues to earn interest until the age of 63 but has not yet claimed the amount, will the account become inoperative?
Is this interpretation correct?
Sahdev
From India, Rajkot
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Thanks for this nice updation keep it up Thanks & Regards, from sumit kumar saxena
From India, Ghaziabad
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From India, Ghaziabad
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With reference to the notification dated 11th November 2016, we would request you to clarify the following points:
1. Do we need to credit interest to members who have resigned and not transferred/withdrawn their PF balance, and their age as of 11th November 2016 is 58 years or more?
2. For those members who have taken up employment abroad - can they be considered "permanently migrated abroad"? Should we collect any documentary evidence proving migration abroad? How do we prove that a member has permanently migrated abroad or gone abroad for employment?
3. In the case of resigning employees, can a letter be obtained from such employees stating that they will transfer their PF to their new establishment within a certain period (e.g., 60 days), or else, PF could be settled, and a cheque dispatched to the member's address with the settlement forms filled in advance?
4. Can the above (point no. 3) be included in the relieving letter of the member?
5. As part of an employee's appointment letter, can we insert a clause stating that on cessation of employment, the employee has to sign a letter for withdrawal of PF within a time limit of 90 to 180 days for transferring the PF balance to a new company/exercising the option of withdrawal?
From India, Thane
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1. Do we need to credit interest to members who have resigned and not transferred/withdrawn their PF balance, and their age as of 11th November 2016 is 58 years or more?
2. For those members who have taken up employment abroad - can they be considered "permanently migrated abroad"? Should we collect any documentary evidence proving migration abroad? How do we prove that a member has permanently migrated abroad or gone abroad for employment?
3. In the case of resigning employees, can a letter be obtained from such employees stating that they will transfer their PF to their new establishment within a certain period (e.g., 60 days), or else, PF could be settled, and a cheque dispatched to the member's address with the settlement forms filled in advance?
4. Can the above (point no. 3) be included in the relieving letter of the member?
5. As part of an employee's appointment letter, can we insert a clause stating that on cessation of employment, the employee has to sign a letter for withdrawal of PF within a time limit of 90 to 180 days for transferring the PF balance to a new company/exercising the option of withdrawal?
From India, Thane
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Dear Sudeep,
The answer to your queries is as follows:
1. Do we need to credit interest to members who have resigned and not transferred/withdrawn their PF balance, and their age as of 11th November 2016 is 58 years or more?
Ans: If the retirement age is 58, interest will be paid for 58 + 3 years.
2. For those members who have taken up employment abroad, can they be considered as "permanently migrated abroad"? Should we collect any documentary evidence proving migration abroad? How do we prove that a member has permanently migrated abroad or gone abroad for employment?
Ans: If a member writes in the resignation as "Migrating out of India," in that case, the interest will be paid Date of Resignation (DOR) + 3 years. If the resignation letter only mentions resignation, the interest will be entitled up to retirement + 3 years.
3. In the case of resigning employees, can a letter be obtained from such employees stating that they will transfer their PF to their new establishment within a certain period (e.g., 60 days)? Otherwise, can the PF be settled, and a check dispatched to the member's address with the settlement forms filled in advance?
Ans: It is mandatory for the member to transfer the PF to the new establishment when joining a new establishment where the PF Act is applicable. Waiting for 60 days is not necessary. The withdrawal application cannot be processed without a date. The application must include a declaration that states, "For the last two months, I have not been in service where PF is applicable." Making a false declaration is not allowed. In the case of retirement, it is the employer's duty to obtain the withdrawal form on the retirement date.
4. Can the information mentioned in point No. 3 be included in the relieving letter of the member?
Ans: No, the answer is already included in point 3.
5. As a part of an employee's appointment letter, can we insert a clause stating that upon cessation of employment, the employee has to sign a letter for the withdrawal of PF within a time limit of 90 to 180 days to transfer the PF balance to the new company or choose the option of withdrawal?
Ans: No, you cannot compel the withdrawal of the amount before the retirement date. If the member joins a new establishment where the PF Act is applicable, they need to provide the Universal Account Number (UAN) and link the UAN. The transfer application will be generated online.
Thanks,
Vidyadhar Bhat
From India, Pune
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The answer to your queries is as follows:
1. Do we need to credit interest to members who have resigned and not transferred/withdrawn their PF balance, and their age as of 11th November 2016 is 58 years or more?
Ans: If the retirement age is 58, interest will be paid for 58 + 3 years.
2. For those members who have taken up employment abroad, can they be considered as "permanently migrated abroad"? Should we collect any documentary evidence proving migration abroad? How do we prove that a member has permanently migrated abroad or gone abroad for employment?
Ans: If a member writes in the resignation as "Migrating out of India," in that case, the interest will be paid Date of Resignation (DOR) + 3 years. If the resignation letter only mentions resignation, the interest will be entitled up to retirement + 3 years.
3. In the case of resigning employees, can a letter be obtained from such employees stating that they will transfer their PF to their new establishment within a certain period (e.g., 60 days)? Otherwise, can the PF be settled, and a check dispatched to the member's address with the settlement forms filled in advance?
Ans: It is mandatory for the member to transfer the PF to the new establishment when joining a new establishment where the PF Act is applicable. Waiting for 60 days is not necessary. The withdrawal application cannot be processed without a date. The application must include a declaration that states, "For the last two months, I have not been in service where PF is applicable." Making a false declaration is not allowed. In the case of retirement, it is the employer's duty to obtain the withdrawal form on the retirement date.
4. Can the information mentioned in point No. 3 be included in the relieving letter of the member?
Ans: No, the answer is already included in point 3.
5. As a part of an employee's appointment letter, can we insert a clause stating that upon cessation of employment, the employee has to sign a letter for the withdrawal of PF within a time limit of 90 to 180 days to transfer the PF balance to the new company or choose the option of withdrawal?
Ans: No, you cannot compel the withdrawal of the amount before the retirement date. If the member joins a new establishment where the PF Act is applicable, they need to provide the Universal Account Number (UAN) and link the UAN. The transfer application will be generated online.
Thanks,
Vidyadhar Bhat
From India, Pune
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Dear Vidhyadharji,
Thank you very much for your answers.
1) I also have a few queries: if an employee leaves the organization at the age of 50 and does not claim the PF accumulation, and the retirement age as per company policy is 60, will they earn interest up to 63 years of age or until they withdraw it?
2) What should be done with already unclaimed accounts as of 31-03-2016? Will they accrue interest? Should we transfer them into PF contributions liability from the Unclaimed Account Ledgers?
Thank you once again. Please assist me with this.
Sahdev
From India, Rajkot
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Thank you very much for your answers.
1) I also have a few queries: if an employee leaves the organization at the age of 50 and does not claim the PF accumulation, and the retirement age as per company policy is 60, will they earn interest up to 63 years of age or until they withdraw it?
2) What should be done with already unclaimed accounts as of 31-03-2016? Will they accrue interest? Should we transfer them into PF contributions liability from the Unclaimed Account Ledgers?
Thank you once again. Please assist me with this.
Sahdev
From India, Rajkot
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The Answers to the Queries of Mr. Sudeep are:
1. Employee resigned and age as on 11th November 2016 is 58 years or more. - No interest to be paid - Inoperative account.
2. Apart from the reason of resignation given as "Migrating out of India" in the resignation letter, the employer can use his own sources and come to know whether the employee is working in India or abroad - Migration refers to the movement of people to a new country to find work or better living - In this case interest will be paid from the date of Resignation + 36 months.
3. In this case, the Employer can devise his own policy - i.e., he could obtain a letter/declaration from the resigning employee and in case of not receiving the transfer application i.e., Form No. 13, within a specified period say 3 months - based on the letter, considering that he is not working anywhere else, PF could be settled and a cheque dispatched to the member's address. In the letter, it should be clearly mentioned that he will transfer his PF to the new Establishment within 60 days else he will inform for an additional grace period, else to treat this as his withdrawal application.
4. There is no harm in including the above in the member's relieving letter and it is not barred by any law. Most of the organizations are adopting this practice. This is being done not only for PF but also for any other statutory dues.
5. Just like some organizations take a bond from the employees, this too could be inserted in the appointment letter in a separate clause which will benefit both the employee and the Organization.
From India, Mumbai
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1. Employee resigned and age as on 11th November 2016 is 58 years or more. - No interest to be paid - Inoperative account.
2. Apart from the reason of resignation given as "Migrating out of India" in the resignation letter, the employer can use his own sources and come to know whether the employee is working in India or abroad - Migration refers to the movement of people to a new country to find work or better living - In this case interest will be paid from the date of Resignation + 36 months.
3. In this case, the Employer can devise his own policy - i.e., he could obtain a letter/declaration from the resigning employee and in case of not receiving the transfer application i.e., Form No. 13, within a specified period say 3 months - based on the letter, considering that he is not working anywhere else, PF could be settled and a cheque dispatched to the member's address. In the letter, it should be clearly mentioned that he will transfer his PF to the new Establishment within 60 days else he will inform for an additional grace period, else to treat this as his withdrawal application.
4. There is no harm in including the above in the member's relieving letter and it is not barred by any law. Most of the organizations are adopting this practice. This is being done not only for PF but also for any other statutory dues.
5. Just like some organizations take a bond from the employees, this too could be inserted in the appointment letter in a separate clause which will benefit both the employee and the Organization.
From India, Mumbai
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Dear Mr. Sahdev,
The member is entitled to receive interest until the retirement date + 3 years or until the withdrawal of the fund, whichever is earlier. From Nov 16 onwards, no inactive account. Members who have migrated out of India or are above the retirement date + 3 years will receive interest.
Thanks,
Vidyadhar Bhat
From India, Pune
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The member is entitled to receive interest until the retirement date + 3 years or until the withdrawal of the fund, whichever is earlier. From Nov 16 onwards, no inactive account. Members who have migrated out of India or are above the retirement date + 3 years will receive interest.
Thanks,
Vidyadhar Bhat
From India, Pune
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Friends, PFA an article on the amendment made, which could be of interest. Thanks
From India, Malappuram
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From India, Malappuram
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Sir, I am 66 years of age and have been contributing to my EPFO account until November 2016. Since then, I have left that job and am currently working after a one-year gap with a company that is not covered under the EPFO system.
I have been informed that EPFO issued a notification in November 2016 stating that an EPF account will be considered operative, and the account holder will continue to earn interest if they leave mainstream employment to pursue self-employment for entrepreneurial goals or work for employers not covered under the EPF scheme. Such employees can now retain their EPF fund balance with the EPF authorities and continue earning interest.
Could you please advise on the current policy regarding the accrual of interest for such accounts?
From India, Gurgaon
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I have been informed that EPFO issued a notification in November 2016 stating that an EPF account will be considered operative, and the account holder will continue to earn interest if they leave mainstream employment to pursue self-employment for entrepreneurial goals or work for employers not covered under the EPF scheme. Such employees can now retain their EPF fund balance with the EPF authorities and continue earning interest.
Could you please advise on the current policy regarding the accrual of interest for such accounts?
From India, Gurgaon
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PF 10 Feb 2016 Incentive Refund Scheme of Admn charges of 10 or 5 percent in year 2016.pdf