Confused About EPS Contributions Despite Not Being a Member? Need Help Understanding This Message!

Hi, I am trying to transfer the PF amount from the previous company to the most recent company. I tried online, but I received the message below. I am not able to understand what they are talking about. Could you please clarify?

DOJ=>1.9.2014, WAGES>15K, NOT AN EPS MEMBER BUT EPS CONTRIBUTIONS RECEIVED. PLEASE CLARIFY THROUGH ER.

An employee whose salary is more than Rs. 15,000 and joins EPF on or after 1st September 2014 will not be covered by the Pension of the EPF. However, due to an oversight, the employer should have contributed 8.33% of the contribution due on Rs. 15,000, i.e., Rs. 1,250, to EPS (Pension Fund) instead of contributing it to PF along with the remaining 3.67% due from him. This is only a technical error, and for this reason, the member's PF will not be lost. You can ask the employer to clarify the issue, i.e., why he has not contributed the entire 12% due by the employer to EPF but has bifurcated his contribution as 8.33% to the Pension Fund and the remaining 3.67% only to PF.

EPFO's Role in Error Rectification

EPFO can rectify this error, but they may not do so because they have a Key Result Area (KRA) that focuses on minimizing claim rejections. Therefore, you need to obtain a clarification letter as mentioned above and submit it to the EPFO. Afterward, you can transfer the balance to the new account. Please ensure that the present employer is not making the same mistake. Also, note that the specified date of 1st September 2014 does not apply to employees who are already members of EPF.

Thanks, Madhu, for the brief explanation. For submitting a letter, do I need to go to the PF office, or is there any other way to submit it, like through email or by post?

Withdrawing PF from a Previous Company

I have already withdrawn the PF amount from my most recent company. I haven't transferred the PF amount from my previous company to my recent one. Is there a way to withdraw the PF amount from my previous company? I tried using Form 31, but it got rejected because I haven't completed 5 years.

You have already withdrawn the PF from the current employer? You should not have done that. You should have first transferred the accumulations of the first account to this one and then closed it by withdrawing the amount in full. If the service (total membership) is less than five years and the amount of accumulation is more than Rs 50,000, then withdrawal will be permitted but after deducting tax at the rate of around 34%. To avoid this, you may have to upload Form 15G, which declares that you do not have taxable income.

Now, when you join another company, an account will be created, and you can transfer the old PF account to the new one and then consider withdrawing once you leave that company as well.

It is unwise to withdraw the PF accumulations because the PF is an investment for the future and not for meeting your current expenditure. You will not earn interest higher than what the EPF will give you, though the trend shows a downward inclination, and in the current scenario, everyone has apprehensions about the invested money. However, that apprehension is present in every investment.