Hi,
I am on deputation to the US from my Indian firm. I get my salary in the US, so there is no deposit to my PF account. It has been about 3 years, and I might continue to be here for at least 1.5 more years. Can you please let me know what would happen to my PF account? Will it go inactive? Will I not earn interest? Is there a way I can deposit some amount to keep it active?
Thanks and regards,
Parikshit Gandhi
From United States, Irving
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I am on deputation to the US from my Indian firm. I get my salary in the US, so there is no deposit to my PF account. It has been about 3 years, and I might continue to be here for at least 1.5 more years. Can you please let me know what would happen to my PF account? Will it go inactive? Will I not earn interest? Is there a way I can deposit some amount to keep it active?
Thanks and regards,
Parikshit Gandhi
From United States, Irving
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Dear Parikishit,
India has eight Social Security Agreements in respect of Belgium, Germany, Switzerland, Denmark, Luxembourg, France, South Korea, and the Netherlands that have been made effective from 1st September 2009, 1st October 2009, 29th January 2011, 1st May 2011, 1st June 2011, 1st July 2011, 1st November 2011, and 1st December 2011 respectively.
A Social Security Agreement is a bilateral instrument to protect the social security interests of workers posted in another country. Being a reciprocal arrangement, it generally provides for the avoidance of double coverage.
SPECIAL PROVISIONS FOR INTERNATIONAL WORKERS
An International Worker (IW) may be an Indian worker or a foreign national.
An International Worker means:
- Any Indian employee who has worked or is going to work in a foreign country with which India has entered into a social security agreement and is eligible to avail the benefits under the social security program of that country, by virtue of the eligibility gained or going to gain under the said agreement;
- An employee other than an Indian employee, holding a passport other than an Indian one, working for an establishment in India to which the EPF & MP Act, 1952 applies.
Merely holding the COC does not make an employee an International Worker. He becomes an IW only after being eligible to avail the benefits under the social security program of any country. After obtaining COC, the employee is exempted from contributing to the social security systems of the foreign country with whom India has SSA; hence, he is not eligible to avail the benefits under the social security program of that country.
Whether PF rules will apply to an employee if his salary is paid outside India?
Yes, the provisions will apply irrespective of where the salary is paid. The PF contributions are liable to be paid on wages, DA, and Retaining Allowance, if any, payable to the employee by the establishment in India.
Generally, a Social Security Agreement covers three provisions. They are:
a) Detachment: Applies to employees sent on posting in another country, provided they are complying with the social security system of the home country.
b) Exportability of Pension: Provision for payment of pension benefits directly without any reduction to the beneficiary choosing to reside in the territory of the home country as well as to a beneficiary choosing to reside in the territory of a third country.
c) Totalisation of Benefits: The period of service rendered by an employee in a foreign country is counted for determining the "eligibility" for benefits, but the quantum of payment is restricted to the length of service on a pro-rata basis.
From India, Mumbai
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208India has eight Social Security Agreements in respect of Belgium, Germany, Switzerland, Denmark, Luxembourg, France, South Korea, and the Netherlands that have been made effective from 1st September 2009, 1st October 2009, 29th January 2011, 1st May 2011, 1st June 2011, 1st July 2011, 1st November 2011, and 1st December 2011 respectively.
A Social Security Agreement is a bilateral instrument to protect the social security interests of workers posted in another country. Being a reciprocal arrangement, it generally provides for the avoidance of double coverage.
SPECIAL PROVISIONS FOR INTERNATIONAL WORKERS
An International Worker (IW) may be an Indian worker or a foreign national.
An International Worker means:
- Any Indian employee who has worked or is going to work in a foreign country with which India has entered into a social security agreement and is eligible to avail the benefits under the social security program of that country, by virtue of the eligibility gained or going to gain under the said agreement;
- An employee other than an Indian employee, holding a passport other than an Indian one, working for an establishment in India to which the EPF & MP Act, 1952 applies.
Merely holding the COC does not make an employee an International Worker. He becomes an IW only after being eligible to avail the benefits under the social security program of any country. After obtaining COC, the employee is exempted from contributing to the social security systems of the foreign country with whom India has SSA; hence, he is not eligible to avail the benefits under the social security program of that country.
Whether PF rules will apply to an employee if his salary is paid outside India?
Yes, the provisions will apply irrespective of where the salary is paid. The PF contributions are liable to be paid on wages, DA, and Retaining Allowance, if any, payable to the employee by the establishment in India.
Generally, a Social Security Agreement covers three provisions. They are:
a) Detachment: Applies to employees sent on posting in another country, provided they are complying with the social security system of the home country.
b) Exportability of Pension: Provision for payment of pension benefits directly without any reduction to the beneficiary choosing to reside in the territory of the home country as well as to a beneficiary choosing to reside in the territory of a third country.
c) Totalisation of Benefits: The period of service rendered by an employee in a foreign country is counted for determining the "eligibility" for benefits, but the quantum of payment is restricted to the length of service on a pro-rata basis.
From India, Mumbai
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PF in case of international worker 23.5.2013.pdf