What are Provident Funds?

The Employees Provident Fund is a retirement savings fund wherein both the employer and employee make equal contributions. Upon retirement or after two months of changing jobs, the employee can claim the accumulated Provident Fund amount, which includes contributions from both parties, along with compound interest earnings.

Additionally, there's the Employees' Pension Scheme linked to the EPF. It provides eligible retirees with a monthly pension. However, it's important to note that partial withdrawals can also be made for specific purposes like medical expenses, education, or home purchase before retirement. The specific rules may vary by country, so it's essential to understand the applicable regulations.

What are Unclaimed Provident Funds?

A provident fund that has not been claimed or accessed by the employee even after 36 months post turning 55 years of age is termed as “inoperative provident funds”. Also, if these funds remain inoperative for additional 7 years, it is termed as “Unclaimed Provident Funds” and thereafter, transferred to Senior Citizen Welfare Fund (SCWF).

Moreover, the unclaimed provident funds from the SCWF must be claimed within the allotted 25 years.

Usually, contributions made by an employee and/or their employer throughout their work are accumulated in these funds with the goal of ensuring retirement security.

Why do provident funds become unclaimed?

Provident funds may become unclaimed due to various reasons, including:

Change of residence: Individuals may change their address without updating it with the provident fund authority, leading to communication lapses.

Oversight during job changes : When people move employment, they sometimes fail to transfer their provident fund accounts, leaving the funds with their former employer.

Lack of awareness : Some individuals may be unaware of their entitlement to a provident fund or may forget about it over time.

Death of Employee : In unfortunate cases, the family members of the deceased individual might be unaware of the existence of the provident fund account or lack the necessary information to claim it.