The Employees’ Provident Fund Organisation (EPFO) – a government-run social security institution that manages provident fund and pension schemes for organised sector employees – has recently revised rules for partial and complete withdrawal of provident fund during employment and post-job loss.
In a major change to the existing rules, the government has now said that in case of unemployment, 75% of the PF balance (including both employer and employee contributions along with the interest earned) can be withdrawn immediately. The remaining 25% can be withdrawn after one year.
Regarding EPS fund access in case of job loss, the proposed provision allows members to withdraw their pension accumulation after 36 months, instead of the current 2 months. According to the government, this move aims to ensure long-term social security in the form of pension benefits for the member and their family.
Amid these changes, many members have several questions in mind — and one prominent concern is about their EPF membership during unemployment.
Does a PF account close if a member changes jobs or stops contributing? And how long does the EPFO continue to pay interest in such cases? Let’s understand these rules in simple terms.
Membership continues even after leaving your job
According to EPF rules, once a person becomes a member, their membership does not end. This means that your EPF membership continues even after you leave your job. It continues until you withdraw all your PF funds.
This means that the EPFO does not deactivate your account; only the contributions stop.
How long will you receive interest?
Now let’s talk about interest. If you quit your job and no contributions are being made to your PF account, interest will continue to accrue for three years.
EPFO rules state that if no contributions are made to an account for three consecutive years, the account is considered “inoperative.”
After this stage, interest on the account stops.
For example: If someone quits their job in June 2022 and no new contributions are made thereafter, interest will accrue until June 2025. After that, interest will stop.
Stopping interest doesn’t mean your money is gone
It’s important to understand that stopping interest doesn’t mean your money is gone. Your principal and previous interest remain safe in the EPFO. You can withdraw this money by filing an online claim whenever you wish.
What if you join a new job?
If you join a new job and open a new EPF account, your old PF can be transferred through your UAN. Upon transfer, your membership and contributions become active again. This not only ensures your service period is considered continuous, but interest also continues to accrue.
What problems can arise if funds remain inactive for a long time?
If a PF account remains inactive for a long time, not only will interest cease, but also account tracking may become difficult. Changes to the old mobile number or bank details can cause problems with OTP or claims. And in some cases, the claim process becomes complicated due to the nominee not being updated.
Therefore, if you change jobs or are not working for a long time, either transfer your PF or complete the withdrawal process.