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Hi All:
We have few employees in our BPO Organization who have completed 10 yrs of service. They are coming up and saying that they would like to quit the company and want to re-join as a new employee to avoid their fund getting migrated towards pension once they complete 10 yrs of service.
Please give an insight, so that we will be in a better position to attend to the employees to help them out on this.
And also if possible give me an outline so that I can calculate and show them their EPF & Pension fund along with the Interest amount and also on the accrual and also any other points supporting this case work.
Thanking you in advance for your suggestions & help in this regard.
Selvi G

From India, Bangalore
Dear Selvi G,
Plz. go through the below discussion, it will help you understanding the issue.

From India, Delhi
hi selvi,
First of all according to epf act once pf account is open, it can not be closed and open again for individual
it is only possible only when he quits employyment and does not join with in two months, any org where epf act is applicable then he can withdraw his amount further if heagain joins org where act is applicable then again his new account will be opened.
Second, i know ur pain, lot of employees jump in to withdraw there funds in between thesevice, acc. To my exp. The only reason behind this is insecurity
to counter this u must issue them pf slips everyyear , the slips can be obtained throuh epf offe or can be dowloadeed from online
tell me if you req any further assistace
thnks manish gupta

From India, Patiala
Dear Gupta Ji,

Sorry to say, but I am not agree with your view that "insecurity is the main reason behind this matter".

In the discussion, Mr. Selvi has clearly mentioned that the employees who has completed 10 years, are approaching for this. Then, insecurity could not be the right reason for this.

In my experience, I would like to say that the employees take this decision themselves after the guidance of their colleagues. They set their mind to not opt the Pension Scheme as the fund of Pension is paid to them as pension and only after 50 / 58 years of age and the amount is also less. So, they withdraw the EPF Fund before completing 10 years services.

Dear Selvi,

I would like to suggest you that here you need to counsel your employees and tell them that if the go for this option then they cannot re-join the organization before 2 months, as to fulfill the unemployment clause for withdrawing the Fund.

I have seen that, some of the member also suggest to keep such employee off-roll for due period to avail them this facility, which is wrong.

So, try to convince them and tell them the benefits of the EPF Fund and Family Pension Fund. Tell them, the pension fund will work like a security fund for their family and the pension amount relies on the length of their service. As long their service will be, the pension amount will also be more. So, just continue with the scheme and try to add more and more service tenure within the scheme. It will also increase their PF Fund, as per the higher interest rate; will increase the Monthly Pension Amount, due to long service tenure; will increase Gratuity Amount, due to long service tenure; and many more benefits. So, tell them just due to a misguidance, they are going to loss so many benefits.

From India, Delhi
Pl. don't do this,if they loose the continuity of service it would adversely affect the gratuity amount, which means 10 X 15 days' salary as per gratuity act. Not only that seniority, promotions, leave, and other no.of years of service related benefits also vanish. Caution them on these dangers.
From India, Bangalore
I agree to the above, There is no use of getting PF withdrawl prior to retirement as leaving the company he may loose employers share also. it is better to get the PF transfer to the other company where he is joinning.

From India, Patiala
Dear Selvi G,
It gives us an impression that, Employees Pension is available after 10 years of service. But there is other condition that, the pension is receivable only after age of 50 and above. In short, 10 years service is a first condition and after that age should be 50 years and above. Please remember, those who have not reached to 50 are not going to get any pension, though they might have completed 10 years of membership.
The idea that you want to withdraw PF and rejoin company is not a nice idea, as it is not going to give you any extra benefit, but perhaps you may loose the continuity of service and benefits arising from continuity.

From India, Kolhapur
It is not a wise idea,If I stop to be polite I would say it is foolish.

1. First thing 10 years of minimum contribution towards EPF pension scheme makes an employee eligible for pension, but on attaining 58 years of age,(50 mentioned by somebody is for reduced pension & this option also is with drawn or will be withdrawn shortly).No benefit will accrue to an employee by resigning & rejoining, in fact as pointed out by others in this forum you stand to loose on many counts. I would say that this will be an injustice to your family, Because the EPF accumulation is tax free at entry & exit & at the end of service accumulated amount will be substatntial. Don't deprive your family of this, Most of these emloyees may be needing some tax saving schemes in any case.Also remember that cumulative interest you get on this good, currently 9.25% or so. There is no tax saving scheme better than this, except housing loan.

2. The pension is calculated by Pensionable service X Pensionable salary(limited to Rs 6500)/ 70. This is for those who have joined after 16 Nov 1995(when pension act came into effect). For others before 1995 some body else in this forum has given an excellent XL sheet.This means that more no of years will get you a better pension.

From India, Thane
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