A person is getting superannuated in the near future. However, to take interest does not want to withdraw his PF accumulation for three more years post superannuation at the age of 60 years. He is contributing through PF Trust. Is it possible? Will he get interest up to the age of 63 years? Any formalities are to be done in between?
From India, Delhi
10From India, Delhi
As a general rule, the PF Trust is required to get the documentation and pay the amount on his retirement.
However, if there is some documentation missing (eg. KYC or bank account details), then the Trust will keep the matter on hold in order to avoid legal liability.
However, it is a bad practice and should be discouraged.
From India, Mumbai
However, if there is some documentation missing (eg. KYC or bank account details), then the Trust will keep the matter on hold in order to avoid legal liability.
However, it is a bad practice and should be discouraged.
From India, Mumbai
This is an issue which the private PF Trusts are facing. The superannuating employee prefers to keep the amount in the PF Trust as it provides substantially higher rate of interest and there is the option of withdrawal at any time. So keeping the money in such account is always better for a retiring employee. This issue was faced by me as a Trustee of the exempted PF Trust and it was affecting the investment as the PF accumulation of the retired employee had to be provided immediately on their application. The number of retired employees retaining their PF amount grew large threatening the very viability of the trust as it had to offer almost twice the interest rate in comparison to the current account interest rate.
To come out of this problem, we issued a circular stating that the PF Trust will give the notified interest for only a limited period, 3 months and thereafter the amount will be transferred to suspense account and no interest will be given. In this process we could overcome the problem.
Hope the above information is useful.
From India, Mumbai
To come out of this problem, we issued a circular stating that the PF Trust will give the notified interest for only a limited period, 3 months and thereafter the amount will be transferred to suspense account and no interest will be given. In this process we could overcome the problem.
Hope the above information is useful.
From India, Mumbai
Hi KK
doesn't that run counter to the PF regulations?
If there is a compliant, and an inspection takes place, will the PF authorities accept that?
Asking more because I don't know the impact.
From India, Mumbai
doesn't that run counter to the PF regulations?
If there is a compliant, and an inspection takes place, will the PF authorities accept that?
Asking more because I don't know the impact.
From India, Mumbai
Yes, strictly speaking the PF Inspector could have objected as there is no such provision for it. On the other hand, there is no provision to keep the fund indefinitely after retirement. So it has to be a reasonable period, we chose three months for it and amended our PF Trust Rules to that effect. Fortunately we could persuade PF authorities to agree to our proposal as otherwise the Trust was becoming unviable. We had retirees of more than five years parking their fund in PF. We had no alternative to keep the Trust alive and this worked. Almost all the old retirees thereafter withdrew their PF accumulation immediately thereafterband we could heave a sigh of relief. These are practical wisdom dictated by the circumstances which will not be there in any text book, the excellent rapport we had with PF authorities had helped.
From India, Mumbai
From India, Mumbai
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf