Personal Finance News

Here are the insights into PF Account Closure Process

Employees Provident Fund (EPF) is a scheme that involves the monthly collection of the amount contributed by the employer and his employee together.

Employees’ Provident Fund and Miscellaneous Act, 1952 introduced the scheme and is managed under the Ministry of Labour and Employment.

EPFO is responsible for providing coverage to the beneficiaries and also keeps a check on enforcement of the acts mentioned above.

In a usual bank account, the account holder can anytime demand to open or close the account which is in contrast to the EPF account.

In the latter, functioning of the account discontinues only if the employee dies, or leaves the job under the designated employer.

As for the financial year, 2020-2021 interest provided on EPF to the subscribers is 8.50%. The rate is annually credited, recommends the Central Board of trustees of EPFO.

Universal Account Number (UAN) is now mandatory which is issued for the employees having an EPF account.

Closing such an account is not possible on easy context. Since, UAN has been enforced, the new employer is likely to ask for the UAN, as provided by past recruiter.

UAN is a 12 digit number that employer or UAN Portal using PF number/member ID provides.

This number is constant throughout the lifetime of an employee and does not change with the change on the job.

UAN foregathers IDs of the provident fund accounts associated with the various organizations in one place.

This number helps in tracking the details about the total EPF contribution under the former and current employer.

Earlier it was a laborious task to collect the details of the activities with multiple IDs.

The introduction of UAN made it is easier to maintain a single account accumulating all the details of the PF ID.

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