Why Pension Contribution Is Not Transferred?

Hello. I have been working in the corporate sector for the last 8 years. I have also switched multiple companies during this time. When I first changed my company, I found out that pension share not transferred in PF transfer. 

After talking to my colleagues, I got to know about the reason. So, let me help in answering this question of yours. Here it goes.

Why is pension amount not transferred to new PF account

Whenever we move to a new job, most of us look to transfer our EPF’s or Employee’s Provident Fund balance to the new employer. You must be confused that the pension amount is not being displayed after switching your PF account. 

For all the members who’re part of the EPFO, the benefits provided under the pension scheme are based on two determining factors.

• Duration of service

• Average of the last drawn salary

Thus, it is not reliant on the actual sum which is present in your PF account. Hence, this is why pension amount is not transferred when you change to a new employer. 

As Advaith stated in his answer, PF money works on the principle of contributing to the post-retirement life of the employee and the sum will continue to transfer. You can refer to his answer for a detailed understanding of the Employees’ Pension Scheme 1995 (EPS 1995).

Let me take you towards the process of transferring the EPF account. 

1. Submit Form 13 to initiate the process of transferring your EPF account.

2. At the PF office, the transfer of your service period record will begin. This is done for pension purposes.

3.  The transfer of your PF balance to the switched EPF account will occur at the PF office.

I hope you now know the reason why pension share is not transferred.

Hey Pal,

In response to the question of why pension contribution is not transferred, I would like to point out that EPFO members need to be aware that pensionary benefits rely on service history and the average of last pay received. It is independent of the precise sum held in the pension fund account. As a result, this sum is not transferred upon a change in work, and eligibility for pension-related benefits can be achieved simply by transferring past service information.

Your pension amount will transfer together with your PF to a new PF account, but it won't be displayed in your new PF passbook, so you can withdraw it without any issues.

When you transfer your PF money, your new PF passbook will not reflect the transferred pension contribution because the goal of the EPF pension is to provide security to the EPF member after retirement. However, the pension money transfers continue. After quitting your work, you may withdraw that sum if your total service was less than 10 years. After reaching the age of 58, you will get a monthly pension amount if your service spans more than 10 years.

Note that in the PF system, 9 years and 6 months of service will also count as 10 years. Therefore, even if you labour for nine years and six months, it will still count as ten years.

• An employee must join the PF (Provident Fund), not the pension fund, if he or she is already receiving a pension under the EPS 1995 programme. One has the right to participate in the pension plan by virtue of being a PF member.

• If a pension member passes away without having a family member who qualifies, the nominee will receive the pension. The pension amount is paid to dependent parents in the absence of a valid nomination (dependent father followed by dependent mother).

• An unmarried person can designate someone outside of his family under the EPS programme. However, once a family is acquired, such nomination is deemed invalid, and the spouse or children, if any, will get the EPS'95 benefits.

• A member who enrols in the Employees' Pension Scheme (EPS 1995) at age 23 and retires at age 58 while making contributions up to the (current) monthly wage maximum of Rs. 15000 may receive a pension of roughly Rs. 7500 if their employment spans 35 years. (15000X35)/70 = Rs. 7500; (Pensionable Salary X Pensionable Service)/70.

• Rule 54 of the CCS (Pension) Rules, 1972 (Effective as of 27/07/2001) provides that an ex-serviceman may receive a family pension in addition to his service pension.

• No individual member may apply for a pension programme exemption. An establishment may, however, ask for an exemption.

• If a member obtains a scheme certificate, it is not necessary to withdraw the PF amount and the pension amount together.

• The duration of unemployment will not be counted against service time. Only contributing service is used to determine pension.

I would like to conclude here about why pension contribution is not transferred. I hope this helps:)

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