Provident fund, aka PF or EPF, often sounds daunting and alien to many. But it doesn’t have to be that way. Other than the fact that it gets cut from your monthly salary, you must know that your PF account is an important part of your retirement fund. So, how much of your salary do you contribute to this account and how much does your employer contribute?
If you look to the PF website for answers, it can certainly be a tad confusing to navigate the first time around. And withdrawing your money whenever you want might seem to involve a lot of red tape. But you see, it’s as simple as preparing a bowl of noodles! Let me show you how.
Step 1
Get your UAN (Universal Account Number) and your cooking pot ready. If you can’t find your UAN number just look at your payslip. It should be mentioned somewhere at the top.
Step 2
Log into the website and put the water on boil. Here – just click on this link and click on “Activate UAN”
Step 3
Fill out the details requested to activate your UAN and generate your OTP. While you’re at this, add the taste maker to the water as it begins to heat up and stir.
Step 4
Add the noodles and veggies to the mix. As you stir the mix you can activate your account. The website uses ancient technology so it might take a few tries on the Captcha, but eventually you get in.
Step 5
Pour out and enjoy your noodles, then go about your daily chores.
After about 6 hours you can log into this page to check your current PF passbook:
- Check your accumulated amount
- Don’t worry if you find multiple member IDs. These are created with every job change.
As long as you have the same UAN and one member ID per company, you’re sorted.
Now that your account is active, you will receive messages on your registered number every month. These messages keep you updated with your current amount as well as the contribution made month on month.
You can always login with your credentials if you need to check your passbook, download it for your needs or even apply to withdraw the money online.
No more physical forms, no more running around. Simple, easy and effective.
Note: People do take loans against their PF account and even withdraw the funds when they’re in need of money, but I wouldn’t suggest doing that.
If you ever go bankrupt, no authority can claim the money in this account. It will remain untouched.
How much do you contribute to your Provident Fund account?
This depends on your salary and your employer. For instance, if your salary is INR 30,000, your “Basic Pay” is usually 50% of this total, that is INR 15,000.
12% of your “Basic Pay” is your own contribution to your PF account every month, that is INR 1,800. Your employer will match this amount.
Employers have the option to limit the PF contribution percentage to 1,800 per month. So, even if your basic pay is over 15,000, the contribution won’t always be at 12%. Moreover, the employer’s contribution doesn’t all go towards the EPF. A part of it goes to your pension scheme or EPSS.
On retiring
When you retire, you’re entitled to 90% of your EPF and the rest is paid to you through a pension plan. If you wish to check how much you’ll be eligible for when you retire at 58, you can use this link.
The interest rate will vary based on market projections, which ranges between 8-9%, but you get a rough estimate of what your savings will look like at the time of retirement.
One last step
The next time you make a bowl of noodles, don’t just check on your PF account. Collect the packets over time and make an eco-pillow out of it all! 🙂 Live sustainably, think long-term. The Provident Fund is your friend in retirement, one that’ll look after you in the absence of regular income. It is your hard earned money over your working life, your contribution set aside for a secure future.
If you have any questions about your PF account, just drop in a comment below. We’re always eager to help.
