Provident fund withdrawal or transfer

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Kapil Tiwari (Querist)
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01 January 2013 1) Since 1/4/2004, in my present job, I have been contributing 50% and for last 2 years 100% (of Rs.6,500) per month to the Provident Fund Scheme and the Employer has been contributing Rs.780 per month. The latest balance in my account is about Rs.3.5 lakhs employees contribution and Rs.58,000 employer's contribution.
2) I will be resigning from this company and shall take up the next job after a gap of 2 months.
Hence, I have the possibility of withdrawing both employees plus employer's contribution after 2 months. If I do not withdraw, in another year (after completion of about 10 years), a significant part of the accumulations in my account will go into the Pension Scheme, where the returns are very low.
3) I am 51 years old, unmarried, with an 82-year old mother, but do not require funds for any emergency presently.

Dear Sirs, kindly offer your valuable guidance if, in my case, I should withdraw the provident fund accumulations or transfer the balance amount to the Provident Fund account in my new job, even if it means opting for the Pension Scheme. I am unable to make up my mind.

CA. Subhash Dangi

CA. Subhash Dangi (Expert)
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01 January 2013 It is advisable to transfer the PF accumulations to your new PF account as it will be earmarked or eligible for pension after completion of prescribed age under Pension scheme.

Though the return is low, u will get regular flow of pension or even family pension in case of death.

Generally the pension will be fixed based on your last year average PF contribution. Therefore higher the PF contribution, higher amount of pension you will fetch.

Since there is no urgency in requirement of funds, it is better to transfer to new PF account and continue to contribute till retirement age.

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Kapil Tiwari

Kapil Tiwari (Querist)
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01 January 2013 Thank you, Subhashji!