EPFO May Reject Your PF Transfer If Your Employer Missed Reporting On-Site Deputation!

When employees go abroad or face a break in salary contributions, they tend to forget about the Non-Contribution Period (NCP). This period, if not updated correctly by the employer with the EPFO, can lead to significant problems. This includes hassles in Provident Fund (PF) transfers and receiving pension benefits.

What is Non-Contribution Period (NCP)?

The NCP refers to any span during which an employee does not make PF contributions. This usually happens during on-site deputation abroad or when the employee is not receiving a salary in India. While no contributions are made during this time, employers must notify the EPFO about the NCP to ensure records are accurate.

What Happens When a Company Doesn’t Report Your NCP to EPFO?

The NCP directly affects the accuracy of both the Provident Fund and Employee Pension Scheme (EPS) records. Since these schemes are interlinked, the duration of the NCP is subtracted from the total service period used for calculating pension benefits.

If the NCP is not updated correctly, it creates mismatched records between the employer’s submissions and the EPFO’s data. This can lead to:

1. PF Transfer Rejections: EPFO may reject PF transfer requests when records don’t match due to missing or incorrect NCP data.
2. Pension Calculations Affected: The pension amount and eligibility are calculated based on the total service period. An unreported NCP can reduce credited service time, thereby reducing pension benefits.
3. Delays in Fund Access: Employees may face long delays in transferring their PF accounts and accessing their funds, causing financial inconvenience.

What Can Employees Do?

Employees should proactively check their EPF passbook and records for any discrepancies in service duration. If there is an onsite deputation or salary break period, employees must ensure their former employer updates the EPFO about the NCP. Providing proof of deputation or non-contribution periods may be necessary to resolve issues.

Read more: EPFO Makes Face Authentication Mandatory for UAN Generation via UMANG.

Conclusion

Accurate updating of Non-Contribution Periods is vital to ensure smooth PF transfers and correct pension calculations. Employees, employers, and EPFO need to coordinate closely to prevent mismatches and avoid unnecessary delays or losses in retirement benefits. Being aware of NCP and its implications empowers employees to safeguard their financial future.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.