EPFO has made it easier for employees to transfer their provident fund balance after they switch employers. The entire process is expected to become automatic for Aadhaar-linked and KYC-compliant Universal Account Number (UAN) holders, the retirement body said on its website.<\/p>\n
The introduction of this provision is significant as it eliminates the need to submit separate transfer applications, thus reducing paperwork and additional hassle. Previously, transfer of PF accounts required approvals from the previous employer, the new employer, as well as the EPFO office.<\/p>\n
However, the transfer does not happen immediately after you join a new company. Under the Employees’ Provident Fund Organisation (EPFO<\/a>)’s new mechanism, the transfer process is triggered only after your new employer deposits the first EPF contribution.<\/p>\n This brings us to a crucial question on whether employees whose companies manage their PF contributions through private or exempted PF trusts also benefit from the new automated transfer system after changing jobs.<\/p>\n Are private or exempted PF trusts covered under this EPFO feature?<\/p>\n If an individual’s previous or current employer manages their provident funds through private or exempted PF trust, then the option of automatic transfer facility will not be available as the automation is limited to accounts where the previous and new companies deposit directly into the EPFO\u2019s common pool, according to Supriya Majumdar, Partner at Elarra Law Offices.<\/p>\n Also Read<\/strong> | How much EPF can you withdraw? Check it online with these simple steps.<\/a><\/p>\n \u201cSince the private trusts maintain their ledger, funds and accounts internally, the automated system will not be able to connect the system gap,\u201d she said.<\/p>\n Rohit Jain, Managing Partner at Singhania & Co., echoed the view, saying the EPFO’s announcement does not change the legal rules governing PF transfers. Instead it only streamlines the administrative process for EPFO-managed accounts. Employees whose PF is maintained by an exempted trust will continue to follow the existing transfer <\/a>process. He explained how the process works:<\/p>\n What is an exempted PF trust?<\/p>\n An exempted PF is a type of provident fund scheme that is managed by an employer through a private trust, rather than being governed and managed by EPFO. In the case of an exempted PF trust, the employer manages the provident fund contributions on its own.<\/p>\n\n