What are Provident Funds?
The Employees Provident Fund (EPF) is a retirement savings scheme where both the employer and employee contribute equally. Upon retirement or after two months of changing jobs, the employee can withdraw the accumulated EPF balance, which includes contributions from both parties and earnings from compound interest. Additionally, the EPF is linked to the Employees' Pension Scheme (EPS), which provides eligible retirees with a monthly pension. It’s also important to note that partial withdrawals are allowed for certain purposes, such as medical expenses, education, or purchasing a home, before retirement. However, the specific regulations may vary by country, so it’s crucial to be aware of the relevant rules.
What are Unclaimed Provident Funds?
A provident fund that remains unclaimed or unused by the employee for 36 months after reaching the age of 55 is referred to as an “inoperative provident fund.” If these funds remain inactive for an additional 7 years, they are classified as “unclaimed provident funds” and are transferred to the Senior Citizen Welfare Fund (SCWF). These unclaimed funds from the SCWF must be claimed within 25 years. Typically, these funds accumulate through contributions made by the employee and/or their employer, with the primary objective of ensuring financial security for retirement.
Why do provident funds become unclaimed?
Provident funds can become unclaimed for several reasons, including:
1: Change of residence: Individuals may relocate without updating their address with the provident fund authority, resulting in missed communications.
2: Overlooking during job changes: When people switch jobs, they sometimes forget to transfer their provident fund accounts, leaving the funds with their previous employer.
3: Lack of awareness: Some individuals may not be aware of their entitlement to a provident fund or may simply forget about it over time.
4: Death of the employee: In unfortunate cases, the family members of a deceased individual may be unaware of the provident fund account or lack the necessary details to claim it.
Can unclaimed provident funds be recovered if the original account holder has passed away?
Yes, unclaimed provident funds can usually be recovered even if the original account holder has passed away. In such instances, the legal heirs or beneficiaries of the deceased may be eligible to claim the funds by completing the required legal procedures and documentation. Share Samadhan can help guide the legal heirs or beneficiaries through the process of claiming the unclaimed provident funds.
How can we assist in recovering unclaimed provident funds?
We offer expert assistance in recovering unclaimed provident funds by:
1: Starting the recovery process on behalf of the client.
2: Coordinating with the relevant authorities, such as the company’s HR department and EPFO.
3: Ensuring compliance with all legal requirements and procedures.
4: Facilitating communication between the client and the authorities.
5: Offering guidance and support throughout the recovery process to ensure a seamless and efficient outcome.