Prime Sponsor - FactoHR.com - Payroll Software with GPS Enabled Attendance, Travel, Performance Management, HRMS. Explore Features
Dear All,
I came know that if employee suppose resigns or leaves with any reason apart from Death or Going abroad permanently at age 50 and as per company policy is age of retirement is 60. in this case if employee will earn interest upto 63 years of age then will he has still not claimed the amount then it will become inoperative account.
it is true interpretation?.
Sahdev
Cite.Co is a repository of information created by your industry peers and experienced seniors sharing their experience and insights.
Join Us and help by adding your inputs. Contributions From Other Members Follow Below...
Thanks for this nice updation keep it up Thanks & Regards, from sumit kumar saxena
With reference to the Notification dated 11th November 2016, we would request you to clarify on the following points:-

1. Do we need to credit interest to members who have resigned and not transferred/ withdrawn their PF balance and their age as on 11th November 2016 is 58 years or more.

2. For those members who have taken up employment abroad - can they be considered "permanently migrated abroad"? Should we collect any documentary evidence proving migration abroad. How do we provde that a member has permanently migrated abroad or gone abroad for employment.

3. In case of resigning employees - Can a letter be obtained from such employees stating that they will transfer their PF to their new establishment with a certain period (Eg. 60 days) or else, PF could be settled and cheque dispatched to member's address and the settlement forms filled in advance,

4. Can the above (Point No. 3) be included in the relieving letter of the member?

5. As a part of an employees' appointment letter, can we insert a clause stating that on cessation of employment, the employee has to sign a letter for withdrawal of PF with a time limit of 90 to 180 days for the employee to transfer the PF balance to new Company / exercise the option of withdrawal,
Dear Sudeep,

The anawer to your queries as under:

1. Do we need to credit interest to members who have resigned and not transferred/ withdrawn their PF balance and their age as on 11th November 2016 is 58 years or more.

Ans: If retirement age is 58, interest will be paid 58 + 3

2. For those members who have taken up employment abroad - can they be considered "permanently migrated abroad"? Should we collect any documentary evidence proving migration abroad. How do we provde that a member has permanently migrated abroad or gone abroad for employment.

Ans.: If member write in the resignation as "Migrating out of India", in that case the interest will be paid DOR + 3 yrs. If in the resignation letter only resignation is written, will entatiled up to retirement + 3

3. In case of resigning employees - Can a letter be obtained from such employees stating that they will transfer their PF to their new establishment with a certain period (Eg. 60 days) or else, PF could be settled and cheque dispatched to member's address and the settlement forms filled in advance,

Ans.: It is mandatory to the member to transfer the PF to the New establishment while he join in the new establishment where PF act applicable. Not necessary to wait for 60 days.

You cannot take withdrawal application without date. In the application declaration is to be given as LAST TWO MONTHS I AM NOT IN SERVICE WHERE PF IS APPLICABLE. iT WILL BE FALSE DECLARATION.

In case of retirement, it is duty of employer to obtain the withdrawal form on retirement date.

4. Can the above (Point No. 3) be included in the relieving letter of the member?

Ans.: No. Answer included in the point 3.

5. As a part of an employees' appointment letter, can we insert a clause stating that on cessation of employment, the employee has to sign a letter for withdrawal of PF with a time limit of 90 to 180 days for the employee to transfer the PF balance to new Company / exercise the option of withdrawal,

Ans.: No. You cannot force to withdraw the amount before date of retirement.

If the member joins in new establishment where PF act is applicable, he has to provide UAN and needs to link the UAN, and the transfer application will be generated on line.

Thanks,

Vidyadhar Bhat
Dear Vidhyadharji,
Thanks a lot for your answers.
1) I have also few queries that if employee leaves the organisation at age of 50 and he/she do not claim the pf accumulation and the retirement age as per company policy is 60 then he will earn interest upto 63 years of age or untill he withdraws it.?
2) what to do with already Unclaimed accounts as on 31-03-2016? will they get interest ? should we transfer them into PF contributions liability from Unclaimed account Ledgers?
Thanks once Again.
Please help me on this.
Sahdev
The Answer to the Queries of Mr. Sudeep are:

1. Employee resigned and age as on 11th November 2016 is 58 years or more. - No Interest to be paid - Inoperative account..

2. Apart from the reason of resignation given as "Migrating out of India"in the resignation letter, employer can use his own source and come to know whether the employee is working in India or Abroad - Migration refers to movement of people to a new country to find work or better living - In this case interest will be paid from date of Resignation + 36 months.

3. In this case, the Employer can devise his own policy - i.e. he could obtain a letter/declaration from the resigning employee and in case of not receiving the transfer application i.e Form No. 13, within a specified period say 3 months - based on the letter, considering that he is not working anywhere else, PF could be settled and cheque dispatched to the member's address. In the letter, it should be clearly mentioned that he will transfer his PF to the new Establishment within 60 days else he will inform for additional grace period, else to treat this as his withdrawal application.

4. There is no harm in including the above in member's relieving letter and it is not barred by any law. Most of the organisations are adopting this practice. This is being done not only for PF but also for any other statutory dues.

5. Just like some organisations take bond from the employees, this too could be inserted in the appointment letter in a separate clause which will benefit both to employee and the Organisation.
Dear Mr. Sahdev,
Member is entitle to receive interest till retirement date + 3 yrs or till withdrawal of fund, which ever earlier.
From Nov 16 onwards, no in operative account. The members migrated out of india or age above retirement date + 3 yrs interest will be received.
Thanks,
Vidyadhar Bhat
Friends, PFA an article on the amendment made, which could be of interest. Thanks

Attached Files
Membership is required for download. Create An Account First
File Type: pdf Inoperative Accounts' Under EPF 11.11.2016.pdf (210.7 KB, 71 views)

Sir I am 66 years of age and have been contributing to my EPFO account till Nov 2016 and have since left that job and am working now after a gap of one year with a company which is not covered under EPFO system . I am informed that EPFO has issued a notification in Nov 2016 which provides that an EPF account will be treated as operative and the EPF account holder will continue to earn interest if he leaves mainstream employment and take up self employment to fulfil their entrepreneurial goals or take up employment with employers not covered under EPF scheme . Such employees can now leave their EPF fund balance with the EPF authorities and continue to earn interest .
May I request you to advise the current policy pertaining to accrual of interest to such accounts ?
Prime Sponsor - Talentedge.com "Interactive Anywhere Learning". Executive courses from top reputed institutes like IIM, XLRI, MICA. View Courses

Please Login To Add Reply






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2019 Cite.Co™