Leaving your job in 2023? Then these are the details you need to know regarding your Provident Fund Final Settlement

Every employee knows the importance of a Provident Fund or PF also known as Employee Provident Fund or EPF. This is a safety net for any salaried person where the employer and the employee both contribute so that on retirement, the person has a great financial portfolio at hand. Hence employees regularly do their PF balance check and make sure their contributions as well as the employer’s contribution are being recorded correctly.

If you are planning to leave your job this year, then you should know all the details regarding the provident fund final settlement. For your help, here are all the details that matter.

But first,

Should you go for provident fund final settlement on leaving a job?

Your provident fund does not close or get deactivated just because you left a job. In fact, as per the new rules, the amount you have in your PF or EPF fund will get interest on your PF balance for 3 years after leaving a job, even when you don’t deposit anything. Hence, if you are not near your retirement age, and you are leaving your present job because you want to focus on some other aspects of life, then don’t go for a final settlement. If you plan to join a job within 3 years, then it is best to keep your PF as it is and just do a pf balance check regularly to see if you are getting any interest or not.

So, keep your EPF account and not withdraw money from it unless financially required. The rules of withdrawal were changed in 2022 due to the massive layoff that happened during the pandemic times. As per the new rules, if you have lost your job for more than one month, you can withdraw about 75% of your net PF balance or 3 months’ salary plus DA, whichever is lower. You can withdraw the rest if you don’t get employed in the next 2 months or more.

Now that we know that it is not absolutely necessary to withdraw money from PF or EPF when leaving a job, let’s see the details in case you want to.

If you are under 50 years

If you are under 50 years of age with 10 years of working life, you can use the new composite claim form, (different for those who have their Aadhar linked and those who haven’t) to go for the final settlement of PF and Scheme Certificate. You won’t be able to get Withdrawal benefits because you are more than 10 years away from retirement.

If you don’t have 10 years of service life, as per EPFO, you can use form 10C to apply for Scheme certificate or Withdrawal benefits. This form will let you retain your Pension Fun Membership. The advantage of retaining this membership is that, if you join a job later on, you can continue the PF membership and once you cross 10 years of service life, you will be eligible for a pension. Your family members will get Family Pension Benefits if you pass away before the age of 58 even with less than 58 years of service, provided you have kept your Pension Fun Membership. 

Above 50 but below 58 years

The process, if you have more than 10 years of working life is the same as above, the only difference being you can also opt for Reduced Pension through form 10D. The pension rate you get will also be reduced from the rate you could have gotten at 58 by 4% annually going backward. The date calculated will be the actual date of you leaving the job or your opted date or 50 years, whichever is later.

For those with less than 10 years of service, the rules and steps remain the same as anyone leaving a job before the age of 50. 

Above 58

You have to use form 10D for Pension and Composite Claim Form (Aadhar or non-Aadhar) for final settlement claims. For those with less than 10 years of service life, only Composite Claim Form has to be used. 

So, these are the steps you have to take when going for PF final settlement after leaving your job in 2023. Do a PF balance check, and then based on your future plan and your age, use the appropriate forms to apply for the claims.

Deny Smith

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