New Delhi: Employees in the private sector frequently switch companies, resulting in the creation of multiple PF accounts. However, are you aware that companies often open a new account instead of merging the new one with the employee’s existing account? This situation causes difficulties for PF subscribers.
This is no longer the case. The EPFO now issues a single “Universal Account Number” (UAN) to every employee. This UAN remains the same throughout the employee’s entire career. A new account does not automatically merge with the old one; consequently, employees often have to submit a specific request to the EPFO to facilitate this merger.
The primary benefit of merging separate PF accounts is that the accumulated savings are consolidated in one place, ensuring financial security at the time of retirement. Furthermore, merging accounts helps avoid delays in withdrawals and eliminates the difficulties often encountered in tracking contributions made by various employers.
What are EPF and UAN?
It is important to note that the EPF (Employees’ Provident Fund) is considered a government-backed savings scheme. Its primary objective is to provide financial security to employees after their retirement. The scheme is administered under the aegis of the EPFO. Both the employee and the employer contribute jointly—each contributing 12% of the employee’s basic salary plus Dearness Allowance—to the EPF fund.
Many people are already familiar with the concept of the Universal Account Number (UAN). Essentially, the UAN is a unique, 12-digit identification number issued by the EPFO.
The Process for Merging PF Accounts
The process of merging PF accounts has now become significantly easier, as the EPFO has introduced an online portal that allows members to facilitate account transfers electronically. However, for this facility to be utilised, it is mandatory that the member’s UAN is active and is linked to their Aadhaar number.
Another Way to Withdraw PF Funds
While the facility to withdraw EPF funds via UPI (Unified Payments Interface) is not currently available, it is expected to be launched very soon. According to a report by PTI, the Union Ministry of Labour is reportedly working on implementing a system that will enable EPF members to withdraw their funds directly using UPI.
