Wednesday, May 29, 2013

Understanding EPF

What is EPF ?

Most of us who are working in the private sector may have heard about EPF. The answer most of the time comes to our mind is "Oh that thing, every month some amount of money is deducted from my salary, that is EPF right? ". Even if you have some idea about it let us explore it in a little bit detail. EPF or (Employee Provident Fund) is a retirement fund created under Employee's provident Fund act 1952 to help employees to generate some kind of savings when they retire. Every month 12 percent of your basic salary is deducted from your salary and kept it in a PF account and it is maintained by the Employees Provident Fund Oraganization (EPFO). Your employer also needs to contribute the same amount to the PF account. Government gives you an interest ( currently 8.5 percent) for keeping the money in PF account.

So things are simple right? Not so simple. In reality, out of 12 percent of your employer contribution, minimum of 8.33 percent or 541 which ever is lesser will go to a pension account known as Employee Pension Scheme (EPS). The interest rates for EPF and EPS are calculated separately on annually compound basis.

How to check my PF balance online ?

You can check your EPF account balance at the following link:

You need to provide your PF office location, PF number, your name, and mobile number to get the EPF balance information.

I heard that my company has a separate PF trust and I wonder what it is ?

It is called an exempted PF trust. Some companies are allowed by the government to form their own PF trust after getting approval from EPFO provided they satisfy some terms and conditions. They have to provide the same rate of return given by EPFO.

I have changed my job and I wanted to tranfer my EPF to my new company. How can I do that? What should I do to transfer EPS ?

To transfer EPF you need to submit the filled up form 13 to your new employer and they will forward it to the Regional Provident Fund office. As per my knowledge, once you transfer the PF amount the EPS will be automatically taken care of.
You can download form 13 from the EPFO website:

My PF transfer is not happening even after several months, what to do now ?

Welcome to common man's India. That is the way India bureaucracy works most of the time. Fortunately we have RTI now and for most people it worked wonders.

Here is an excellent post by Manish on how to file an RTI for EPF transfer or withdrawal:

Can I take a loan from EPF ?

Answer is yes. You can take a loan from EPF for the following purposes:

1. Purchase of a plot for constructing a house
2. Purchasing a home/flat
2. Home Improvement
4. Marriage of children, self, daughter, sister
5. Repaying home loan
6. Loss of Job
7. Higher education of children
8. Purchasing equipment for physically disabled family member

To take a loan, you need to submit form 31 and also submit the required supporting documents.

Can I increase my contribution to EPF ?

Yes you can increase your contribution to EPF voluntarily. But the companies contribution remains the same as 12 percent.

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