One of the exit formalities that you need to complete at the time of switching jobs is to transfer your Provident Fund (PF) balance to the new employer. As per old rules, you needed to open a new PF account with the new employer and then submit the transfer application to the old employee. However, after the amendments by the Employees’ Provident Fund Organization (EPFO), you can transfer PF online.
Pre-Requisites to Online PF Transfer
It is mandatory to have a Universal Account Number (UAN) to initiate the process. UAN is a unique 12-digit number allotted by the Ministry of Employment. It is an important personal detail just like PAN or Aadhar and comes in handy for PF-related matters. It should be activated in the UAN portal and updated with your mobile number, bank account number, IFSC code e-KYC, Aadhar and other personal information.
You must communicate to your new organization about your existing UAN by filling up the Composite Declaration Form (F-11). This form contains details about your UAN and previous employer. If you don’t do so, the new employer may create a new UAN, which could complicate the process regarding transfer as well as pension calculation by EPFO.
Just in case you end up with two UANs, make sure that you withdraw the old Provident fund balance, close the previous UAN and transfer the amount to the new UAN. However, you can do UAN to UAN transfer only after two months of changing jobs.
Steps for PF Online Transfer
Step 1: Log in to the Member e-SEWA portal using your UAN and password.
Step 2: Click on the ‘One Member-One EPF’ (Transfer Request) in the ‘Online Services’ menu.
Step 3: Verify the PF account and personal details of the new and old employer. You need to send the claim for digital attestation to either a new or old employer.
Step 4: Click on the ‘Get OTP’ button to receive OTP on your registered mobile number for UAN. Enter the OTP and then hit the ‘Submit’ button.
Step 5: Download the PDF format of the PF claim request, self-attest it and submit it to the chosen employer within 10 days.
It may take a few months for employers and EPFO to complete the entire process. You can get status updates via SMS on your mobile number.
Advice for Utilization of Withdrawn PF Fund
Ideally, you should transfer the previous accumulated PF amount from the previous employer to the new employer. However, if you have withdrawn the amount for some reason and it is staying idle, you should look at investment options to earn interest on it.
A fixed deposit would be the safest instrument to invest this money. It gives assured returns and you can encash it easily during an emergency. You can choose to invest in cumulative FD where interest is re-invested on the principal amount every year on a compounding basis and you get a total payout at maturity. Another option is non-cumulative FD which allows you to earn periodic interest on a monthly, quarterly, semi-annual or annual basis. You can consider investing in Bajaj Finance FD to get a high, attractive interest rate of up to 7.25%.
PF is the hard-earned money that can help you meet your old age expenses. It is your retirement corpus and you should let it grow wisely. Hence, PF Online transfer should be your top priority when you change employment.