Great News - Universal Account Number for PF Accounts - A Reality!!!

If you are a salaried employee and have gone through (or seen a friend do so) the process of actually transferring your PF Account from one employer to another, then I am pretty confident that you understand how painful this process is and the high probability of delays and problems. This system has been in-force for many decades and it was high time the authorities did something about it. 

Thankfully, the EPF Organization has finally decided to help out the PF Account holders. The purpose of this article is to share with you this great news and help you understand more about it...

So, what is this Great News?

Very Soon, you will be able to switch jobs and get your PF money transferred - Without any Hassle. Isnt this Great News?

Yes, the Employees Provident Fund Organisation (EPFO) expects to operationlise permanent or universal account numbers (UAN) to its over 4 crore subscribers by October 15 this year.

What is this Universal Account Number?

You must be aware of what a PF Account Number is - isnt it? When we usually switch jobs, our old PF Account is closed and a new PF Account is opened in our name. Moving forward, what is proposed is that, you will get one PF account number and you can take it with you wherever you go (employment wise) and continue to use the same PF account until you retire. Hence the name - Universal Account Number. 

How would the UAN work?

The universal account numbers will be portable throughout the working career of employees, something similar to how core banking services work. After getting your UAN, all you need to do is, to provide the same on joining a new establishment to enable the employer to in turn link the new allotted member identification number to UAN. This will help in smoothening out the process of filing of PF transfer claims on changing jobs.

Yes, you read it right. All you need is your UAN and your new employer will be able to start crediting your PF contribution right away into your PF Account. 

Will I be able to track my PF Account online?

Yes. All Account holders (Employees) would be also be given a personalised log-in though which they can see carry out different tasks like: 

• Download UAN card
• View updated PF account balance
• Download PF Account statement
• File and view transfer/withdrawal claims and 
• Update KYC information

When Will I Get my UAN?

According to a recent Government Circular, all PF Account holders will get their UAN before October 15th. (Even if this gets delayed somehow, you will definitely get your UAN in the next few months)

Is there Anything I Need to Do?

Actually No. As of now, the EPFO has asked Employers to share its employee details (KYC Info) and the deadline for that is September 15th of 2014. Once that info is shared by employers, EPFO will go ahead and issue UAN's to PF Account holders...

My Thoughts:

This is real great news in many levels. Firstly, the hassle of transferring our PF Account was the main reason why people withdrew their corpus while switching jobs. If this is eliminated, the real purpose of the PF Account (To help accumulate a retirement corpus) will be achieved. Secondly, a huge burden is lifted off the employers part. They no longer have to worry about submitting requests for transfer or withdrawal and other PF Account related activities. If you join them, they just get your UAN and start contributing PF. If you resign, they just stop PF contributions and you will take your UAN with you. Isnt this amazing?

Personally, I am extremely glad our EPFO finally did something beneficial for its account holders. As this is the first time we are doing something like this, there are bound to be unexpected delays and hiccups. However, I am pretty sure that over the course of the next year all things will be smoothed out and we will have a world class retirement benefit system...

The New Universal Account Number - Great News for Salaried Employees in India

Most of us would have switched jobs at some point in our careers and in all probabilities our colleagues would’ve advised us to withdraw our PF corpus when we actually switch because they probably went through the arduous process of transferring their PF Account from one employer to another. Are you someone who had withdrawn your PF just because of this reason, in spite of wanting to get your PF Transferred? Or, Are you someone who actually endured the lengthy and painful process of getting your PF Account transferred?

If so, this news is going to be extremely pleasing for you…

What is this Good News?

The EPF Organization, the governing body of all our EPF Accounts has decided to provide Permanent PF Account Numbers to the over 5 crores members of EPF. It will be called the Universal Account Number or UAN.

Why Did the EPF Organization Decide in Favor of this UAN?

Every year over 12 lakh requests are placed by account holders to transfer their PF corpus from their old account to their new account. This is a very significant load on their staff. On top of this, the current process is time consuming and requires a lot of follow-up from the EPF Account Holder. As a result, even though people are not supposed to close their accounts when they switch jobs, they do it.

So, to motivate people to save up more money for their retirement in their PF Accounts and to reduce the hassle for both the Account Holders as well as Staff working in the EPF Offices, they decided to come up with this UAN.

What Does This Mean?

This means that, once you have your UAN, when you switch jobs, all you have to do is, give your new employer this UAN and he will start crediting your PF money into this account. There will be no hassle of actually filling up forms to initiate a transfer from your old job and follow-up regularly to actually make sure your money reaches the new PF Account…

When will this Start?

The current plan is to start rolling out these UAN’s to EPF Account holders starting October of 2014.

My Opinion About This:

Though October 2014 is still a good 6 months away, considering the magnitude of this rollout I am thinking maybe – add another 3 to 6 months to be realistic. Eitherways, this is an excellent initiative by the EPFO Senior Management and this will go a long way in ensuring that at least this generation of working class will retire with a decent enough savings…

Most of us withdraw our corpus when we switch jobs to avoid this hassle and somehow or other the money gets spent. So, with every switch and withdrawal, our eventual retirement corpus becomes that much smaller.

If we continue to accumulate our PF money throughout our working careers which will span around 20+ years, we can definitely retire with a handsome PF Corpus…

Some Last Words:

Though the purpose of the PF Corpus is to help us save up money for our retirement, given the current rate at which cost of living in India is going up, we should definitely plan to save up a separate retirement corpus that is on top of our PF Corpus.

I had published a book last year titled “Your Complete Guide to Indian Income Tax and Retiring as a Crorepati” which explains how you can save up a Crorepati Retirement Portfolio by just investing under the Section 80C Tax Savings each year.
You can click here to buy the book for just USD 4.99/-

Alternately, if you would like to pay for the book in Rupees, feel free to send an email at anandvijayakumar007@gmail.com and I will share more details with you.

Happy Retirement