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Changing jobs is a normal part of professional growth, but one common mistake many employees make is ignoring their old Provident Fund (PF) accounts. When you switch companies, a new PF account often gets created, and due to lack of awareness or simple delay, people forget to merge it with their existing account. While this may seem harmless, maintaining two or more PF accounts can lead to serious financial losses in the long run.

According to rules set by Employees’ Provident Fund Organisation, every employee should ideally have one Universal Account Number (UAN) linked to a single EPF account, regardless of how many times they change jobs. If you still have multiple PF accounts, it is important to act immediately. Here’s why.

Why Having Two PF Accounts Can Be Risky

1. You May Lose Your EPS Pension Benefits

To become eligible for a monthly pension under the Employees’ Pension Scheme (EPS), your total service period must be at least 10 years. If your PF accounts remain unmerged, EPFO may not consider your employment history as continuous service.

For example, if you worked for 5 years in one company and 5 years in another but never merged the accounts, your service record could appear broken. This may result in loss of pension eligibility after retirement, which can be a major financial setback.

2. Higher Tax Liability on PF Withdrawal

Under income tax rules, PF withdrawals are tax-free only after completing 5 years of continuous service. If you withdraw PF money before that period, Tax Deducted at Source (TDS) applies.

Now imagine this scenario:

• Company A: 3 years of service

• Company B: 3 years of service

If PF accounts are merged, your total service becomes 6 years, making withdrawals tax-free.
But if accounts remain separate, each account reflects less than 5 years of service, and you may have to pay tax on withdrawal, even though you worked for more than 5 years in total.

3. Old PF Accounts Can Become Inactive

If no contribution is made to a PF account for three consecutive years, it may be treated as an inactive account. Although interest may still be credited in certain cases, inactive accounts often face:

• Delays in claim settlement

• Technical verification issues

• Difficulty in tracking funds

In some situations, your money can remain stuck for a long time, creating unnecessary stress during emergencies or retirement planning.

4. Compliance Issues with EPFO Rules

EPFO guidelines clearly follow the principle of “One Member – One EPF Account.” Having multiple PF accounts or multiple UANs can create compliance issues and complicate employer verification, claim approvals, and service records.

What Should You Do? Merge Your PF Accounts Online

The good news is that merging PF accounts is now completely online, simple, and free. You can do it from the comfort of your home using the EPFO Unified Portal.

Step-by-Step Process to Merge PF Accounts

1. Log in to the UAN Member Portal using your UAN and password

2. Go to the Online Services section

3. Click on “One Member – One EPF Account (Transfer Request)”

4. Enter details of your previous and current employment

5. Choose either your current or previous employer for verification

6. Submit the request using OTP verification

Once approved, your old PF balance and service history will be transferred to your active account.

Why You Should Act Immediately

Delaying PF account merging can:

• Reduce your retirement pension

• Increase tax burden

• Create long-term claim complications

• Make financial planning inaccurate

By merging your PF accounts today, you ensure continuous service history, better pension eligibility, and smooth access to your savings when you need them the most.

Final Thoughts

Your Provident Fund is not just a deduction from your salary—it is a crucial part of your financial security and retirement planning. Keeping multiple PF accounts may look harmless today, but it can silently erode your future benefits.

If you have ever changed jobs, take a few minutes to check your UAN status and merge all your PF accounts immediately. A small step today can protect your pension, save tax, and secure your hard-earned money for the future.

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