EPS Rules: Many employed individuals rely on their Provident Fund contributions for financial security in retirement. Each month, a portion of an employee’s salary is deducted and put into their Provident Fund account, with a share also allocated to the Employees’ Pension Scheme.
However, it is common for employees to overlook verifying the accuracy of their monthly deposits, which can lead to significant repercussions if not rectified promptly. Monitoring the account passbook regularly is crucial to ensure the correct amounts are being deposited by both the employee and the employer. By comparing the pension deposits with the deductions on their payslip, employees can spot any discrepancies early on.
To check your account passbook, begin by accessing the Provident Fund Organization’s website and logging in with your Universal Account Number and password. Select the Member Identification Number associated with your current or past employer and navigate to the account passbook section, specifically the pension plan deposits. Compare the monthly deposit amounts with your payslip deductions and ensure all entries are accurate and consistent.
When changing jobs, your Universal Account Number remains the same, and a new Member Identification Number is created by your new employer to link to your existing Provident Fund account. It is important to update your employer with your Universal Account Number and ensure that your personal details match across all employment records to facilitate a smooth transfer of Provident Fund accounts.
Transferring Provident Fund funds from your old employer to the new one is advisable to maintain continuous savings and avoid tax implications associated with early withdrawals. By transferring the amount, the funds continue to accrue interest, and your pension service record carries forward. Employees with less than ten years of service can choose to carry forward their pension service through a certificate or withdraw the pension amount following specific guidelines.
Withdrawals from the Provident Fund before completing five years of service are taxable, including the total period of service across different jobs. Thus, transferring funds when changing jobs is beneficial, ensuring sustained savings and potentially avoiding tax liabilities.
To prevent your old Provident Fund account from becoming inactive, it is essential to periodically review your account details and complete the necessary steps to link funds and service records to your new account after changing jobs.