Next month onwards, provident fund (PF) account will be transferred automatically on the job change.
As reported by TOI, to address premature closing of provident fund accounts, the Employees' Provident Fund Organization has decided to transfer the PF account automatically in case of job change. Chief provident fund commissioner VP Joy revealed to TOI that, "Whenever there is a change of job, a lot of accounts are closed; then they (the employees) restart their account later on.” This is one of the initiatives taken by the EPFO to improve its services and to make it user-friendly. The system will be effective from next month.
In order to discourage people from closing their accounts during the job change, VP Joy adds that they have made Aadhaar compulsory for the enrollments and the PF account is going to be the permanent account now. The worker can retain the same account for social security as well.
As per the media reports, if an employee has verified his Aadhaar ID, then his account will be transferred without any application in future anywhere in the country.
The EPFO is also increasing its efforts to extend its coverage. In the last six months, around more than one crore workers have been enrolled and now the focus is on their retention. EPFO recommends that PF money should be withdrawn only for essential purposes such as hospitalization, housing, education of kids etc. It will allow them to get social security.
As reported by People Matters recently, EPFO will allow its 1 million subscribers to withdraw up to 90 percent of their EPF accumulations to buy homes. Additionally, Hudco will aid eligible subscribers to get a credit-linked subsidy under the Pradhan Mantri Awas Scheme (PMAY). Anyone who is looking to purchase a house can get subsidies up to Rs.2.6 lacs in schemes for economically weaker sections as well as for lower- and middle-income groups.