This decision was approved in a meeting of the Central Board of Trustees (CBT) held on November 20, 2021.
Currently, as per the EPF rules, once a member changes his/her job, a new EPF account is opened with the new company. The employee is required to transfer the money held in the EPF account with the previous employer to his/her new employer. This can be done online on the Member Sewa portal, provided Universal Account Number (UAN) is linked with Aadhaar. If UAN is not linked with Aadhaar, then the employee will have to do this offline by submitting a form to the new employer.
It is important to transfer one’s EPF account from the previous employer to the new one to ensure that the continuous service period is accurately captured for the purpose of calculation of pension for the Employees’ Pension Scheme (EPS) and for income tax purposes.
Prashant Singh, Vice President and Business Head of CPO- Teamlease services says, “So far employees had been undergoing nightmare to transfer their PF from earlier employer to the new one. Paperwork, timelines and back and forth led to confusion and delay in the entire process. With this new initiative, it would ease the way to transfer the PF from earlier employer to new employer seamlessly. The employee just needs to ensure that his/her UAN is linked to Aadhaar. If not linked a small manual/offline form submission can be given to new employer to establish that. This is another big relief for employee and employer as this is used to consume huge amount of time between both of them to process and transfer”
As per a press release issued by the Ministry of Labour and Employment on November 20, “Approval was accorded for development of centralized IT-enabled systems by C-DAC. Post this, the field functionalities will move on a central database in a phased manner enabling smoother operations and enhanced service delivery. The centralized system will facilitate de-duplication & merger of all PF accounts of any member. It will remove the requirement of transfer of account on change of job.”
Few other key decisions were taken by the CBT in its meeting held on November 20. This includes the decision to empower the Finance Investment & Audit Committee (FIAC) to decide upon the investment options, on a case-to-case basis, for investment in all such asset classes which are included in the Pattern of Investment as notified by the Government of India. This would mean that the funds from EPFO will be allowed to be invested in alternative investment funds (AIFs).
“The board has approved investments in AIFs. However, it will be on a case to case basis and we shall only focus on government-backed alternatives which are category one funds like public sector InvITs,” labour and employment secretary Sunil Barthwal said after the 229th CBT meeting on Saturday.