Is your pension fund at risk? Steps to unlock full benefits

Why merging all past EPS accounts is critical to unlocking EPF funds, avoiding payout delays

- Aprajita Sharma

When switching jobs, you probably focus on transferring or withdrawing your provident fund (PF), assuming your entire retirement savings are covered. But what if part of your money was stuck in limbo—unclaimed, inaccessible, and potentially lost forever?

That's exactly what happened to Mr. A, who worked for three companies, each handling PF differently. When he finally decided to withdraw his savings, he hit an unexpected roadblock—his pension contributions under the Employees' Pension Scheme (EPS) had never been merged. Without this step, his withdrawal request was denied.

His case is a stark reminder that missing a step in the EPS transfer process can cause delays, confusion, and even financial loss. Unlike PF, which is actively transferred or withdrawn, EPS is often overlooked—until it's too late.

Here's why missing this crucial step can cost you and how to avoid it.

How EPS contributions work

Employers contribute 12% of an employee's basic salary to the provident fund system. Of this, 8.33% is allocated to EPS, while 3.67% goes to the Employee Provident Fund (EPF).

Regardless of whether an employer is exempt (managing PF through a private trust) or non-exempt (managed directly by the EPFO), all pension contributions flow to the Employees' Provident Fund Organisation (EPFO).

In Mr. A's case, his first two employers were exempt—they handled their employees' PF through private trusts, while only EPS portion went to EPFO.

His third employer, however, was non-exempt, meaning both his PF and EPS were directly managed by EPFO. This difference in fund management turned out to be a crucial factor when he attempted to withdraw his funds.

The hidden EPS transfer rule