The Employee Provident Fund Organisation (EPFO) issues scheme certificates to EPF account holders who withdraw their contributions but wish to retain their EPFO membership for future pension benefits. According to reports from Mint, this certificate is specifically designed for members who want to carry forward their pension service when changing jobs, ensuring that previous pensionable service is added to new employment periods. The certificate facilitates seamless transfer of pension accounts during employment transitions and provides continuity for retirement benefits.
As reported by Mint, members with 10 years or more of service and who have not yet reached 58 years of age are mandatorily issued scheme certificates. Additionally, members with less than 10 years of service can voluntarily opt for scheme certificates to carry forward their pension service, though this is not mandatory. The certificate serves as a bridge between employment periods, ensuring that pensionable service is not lost when switching jobs.
According to Mint, scheme certificates offer several significant advantages for EPF members. The certificate facilitates transfer of pension accounts when employment changes, ensuring that previous pensionable service is added to new employer contributions. Upon joining a new job, the scheme certificate guarantees that previous pensionable service is included in the new employer's pension calculations, thereby increasing the total pension benefit amount. Additionally, if the certificate holder dies, family members can claim pension benefits using the scheme certificate, providing financial security for dependents.
As reported by Mint, members with 8 years of service can withdraw benefits upon surrender of their scheme certificate, though this is not recommended. The article advises that members should complete 10 years of pensionable service to become eligible for pension under the EPS 1995 scheme, allowing early/reduced pension at 50 years of age or superannuation pension at 58 years of age. This ensures members receive the maximum pension benefits available under the current scheme structure.
According to Mint, the current EPF interest rate stands at 8.25% for both EPF and voluntary provident fund (VPF) contributions. The scheme operates through joint contributions from both employer and employee, with mandatory enrollment for salaried individuals earning basic pay and dearness allowance up to ₹15,000. Employee contributions up to ₹1.5 lakh annually are tax-exempt under Section 80C, while employer contributions up to 12% (below ₹7.5 lakh) are exempt under both old and new tax regimes. Interest on accumulated contributions up to ₹2.5 lakh is tax-free for employees, with interest on employer contributions also being tax-free.
For members who were eligible for EPS in previous employment but not in current company, their EPS account becomes inactive during EPF transfer. As per financial experts, EPS amount cannot be withdrawn but can be transferred to current EPF account through specific procedures. The transfer process involves downloading Form 10C, filling and attesting the form, and submitting it to EPFO online portal. Members can access their EPF Member Portal, navigate to Online Services, and select 'Claim (Form 31, 19 and 10C)' to initiate the transfer process, ensuring continuity of pensionable service across employment transitions.
