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Business News/ Money / Calculators/  How to make your EPF account portable
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How to make your EPF account portable

The Universal Account Number makes the provident fund a more user-friendly vehicle

Shyamal Banerjee/MintPremium
Shyamal Banerjee/Mint

The Employees’ Provident Fund (EPF) account is one of the best investment vehicles to save for retirement. But owing to its leaky structure, which makes withdrawals easy, few have been able to have the discipline to stay invested in it for the long term. Those who don’t withdraw, either forget or postpone any decision on their previous EPF accounts due to painful delays. But all that’s set to change. On 16 October, the Prime Minister inaugurated provident fund portability through the Universal Account Number (UAN), under which you will now be able to have a single account to park all your EPF money even as you change jobs. Till now, every time you changed jobs, you had to change your EPF account and get the money transferred from the previous account to the new one. Owing to delays and a provision that allows for EPF withdrawal in case of two months of unemployment, most employees choose to withdraw their money. Since the EPF system recognizes you through your employer, the authorities don’t have a way of tracking you when you move jobs. But with the UAN, you will be uniquely identified, and the intermediation of your employer will not be needed.

“It will make EPF a genuine social security programme, instead of being a savings bank account, by reducing transmission losses. This will also mean that the EPFO will hold less liquid cash as employees won’t blindly opt for settlements and will be forced to transfer instead. Employees will also benefit through higher investment returns," said Amit Gopal, senior vice-president, India Life Capital Pvt. Ltd, an investment and legal consulting firm in retirement benefits.

Mint Money tells you how to get your UAN and make use of it. Read on.

Who gets UAN?

To begin with, the Employees’ Provident Fund Organisation (EPFO), has allocated UAN to employees who were in service as of 1 January this year. So far EPFO has allotted UAN to around 41.7 million members. The UAN is being given to employers who will then communicate the number to their employees. You, too, can check if a UAN has been allotted to you on the EPFO’s website (https://goo.gl/TlwQTV ). Just type in your EPF number and the website will tell you if you have been allotted a number. You can then ask your employer for the number, who will take down your know-your-customer (KYC) details, feed it into your UAN, and verify it through a digital signature. Alternatively, you can upload the KYC details directly, but these details will need to be verified by the employer.

The next step is to activate your UAN. Again, go to the website and key in your UAN, your member ID and your mobile phone number. The portal will send you a one-time password for security reasons. You will be able to see your EPF passbook updated as on date, and you will be able to add all your previous accounts into this UAN.

“We are moving slowly and taking one step at a time. At present, you can bring your past account under one umbrella UAN, but you will need to transfer money right now from your past accounts. Employees can make use of the online transfer claim portal facility (OTCP) for this purpose. We are still in the process of simplifying the UAN further," said K.K. Jalan, Central Provident Fund Commissioner.

To transfer money, go to www.epfindia.com and click on the OTCP link that shows under the ‘for employees’ section. If you are eligible, you will need to first register online and then fill up the transfer claim form. You need to fill in the details of your past and current employers and your EPF account details along with your bank account details. This form will then need to be attested by any of the employers whose digital signature is registered with the EPFO.

You’ll also need to take a print out, sign and submit it to the employer you chose for attestation. This isn’t mandatory but the employer may need it for record and may not verify your details until the form is submitted. With OTCP, the EPFO is planning to settle claims in 10-12 days.

How does UAN help?

The biggest advantage of UAN is account portability. But for that to work, you need to give your KYC details so that the EPFO can identify you, irrespective of your employer. You can either upload the KYC details on your own or give to your employer. Your bank account details and Permanent Account Number (PAN) or Aadhaar number are mandatory here. Once verified, your account is completely portable. This means that the next time you change your job, you just need to submit your UAN to the new employer, who will then verify the KYC details and start contributing money in the same account. “Additionally, the employees will also get an SMS on their registered mobile (phone) every time a transaction takes place so that they stay updated," said Jalan.

While UAN is allotted to employees with an active EPF account from January this year, older accounts don’t have this facility yet. “We are still working on that. It will mostly be application based, where an employee will have to apply for UAN. We should come out with it in 10-15 days. An employee should be able to get UAN within 24 hours from application," added Jalan.

Also, even as UAN is allotted, the EPF account numbers will also continue. “We are slowly progressing towards UAN and have not wished away the old system yet. The idea is to be employee centric and allow for portability, and with UAN we will achieve these goals. Slowly we will do away with the EPF account numbers," said Jalan.

Just like the National Pension System (NPS), which is completely portable through a permanent retirement account number (PRAN), the EPF account, too, has become portable to a large extent with UAN.

“Real benefits will accrue if employees can integrate all their EPF accounts as many people have multiple EPF accounts," said Gopal. You may have to transfer your past accounts that have not been allotted the UAN, but when you change your job the next time, you will need only the UAN to be able to reap full benefits of portability. And since the EPF knows you through your UAN, withdrawals will not be easy and the purpose of a long-term investment will be met. So, make full use of UAN and save for retirement.

UAN is a new facility and its success will be known as more people use it. Your comments and feedback are welcome.

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Published: 16 Oct 2014, 06:43 PM IST
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