Electronic Transfers of Provident Fund (PF) Accounts on Job Changes
One thing which followed globalization is high employee turnover or job hopping. But transfer of one's PF Account from one employer to another was not smooth as switching jobs. But that is all gone now with the Country's largest retirement fund manager, more popularly known as EPFO (Employees Provident Fund Organization) set to start e-transfers of PF Accounts. Under the electronic transfer of PF Accounts while reducing the paper work it will drastically reduce the time. Central PF Commissioner Samirendra Chatterjee said, ""We are working on a new software wherein a person on starting a new job can transfer her or his funds from the PF account in just about 15 days. It would work on the same lines as the online settlement of claims through the National Electronic Fund Transfer system."
Under the current system of transfer of PF accounts, one has to follow a time consuming 47 step process and against a 30 days wait, one has to wait for a much longer time, though there is provision to check the status of PF Account. Employees now in a new job fill an application form for a new PF account, along with a copy of 'Form 13' to transfer their PF money from their previous account to the new one. The employer submits this form to the regional PF office, which contacts the previous PF office and transfers the funds. However under the software, which will be operational by year end, allow all Regional PF Offices to electronically transmit details of employees accounts and balances on it. "We will soon start real-time testing of the software in our offices," Chatterjee said.
It has been decided by The Central Board of Trustees of the EPFO to stop paying interest on inoperative accounts from April 2011. Resultantly, the EPFO expects about half of these accounts to be closed, with subscribers either withdrawing their PF money or transferring it to new accounts.