What is Meant by An In-Operative PF Account?

Under the scheme of EPFO (employees provident fund organization) if any organization or company employs about twenty or more than that employees and if their basic salary + DA and is less than 15000 and then the 12% of their basic salary is deposited in their PF account and 12% is deposited by the company. 

In this way, a total of 24% of the PF is deposited in the PF account of the employee. When this deposit is made a substantial interest is also paid every financial year by the Employees Provident Fund Organization. 

In many cases, this PF account becomes inactive which is known as the operative PF account. Today in this post we will be talking about this and also the condition under which this PF account can become operative.

What do you mean by an Operative PF account?

The PF subscribers will be receiving an equal interest in their own PF account as long as they are in the job. Many times people leave their job and do not claim the PF money that has been deposited in their PF account all this time. 

When these unclaimed PF accounts are there then they are left deactivated, this is when they are called “Inoperative PF accounts”. Always remember that the PF money should be withdrawn before it is converted to an operative PF account.

When does a PF account become inactive?

• According to the earlier rules of EPFO even after three years of leaving the job, the PF account will be inoperative even if it was not withdrawn. But the rules have been changed now.

• A PF account stays active until the age of 58 after quitting the job or even after the retirement before age 55. But once an individual has crossed the age of 58 then the PF account becomes inoperative.

• A PF should be withdrawn just within three years of an individual leaving the job or after the retirement of them i.e. the age of 55. 

• When an individual goes abroad then he should withdraw the PF within three years or else the account will become an operative PF account.

• If there is a case of death, then the nominee has to file a claim within the time period of three years or else after this the PF account becomes operative.

Is there any interest given in an operative PF account?

If the PF account is operative then there is no interest paid. This is where the PF subscribers need to withdraw all the money before it becomes inactive. 

How Can You Withdraw Money From An Inactive PF Account?

It is said that about 6000 crores of PF account have never been claimed. It becomes difficult if you withdraw money from an operative PF account so it is important to withdraw the money before one leaves the job or is about to get retired. 

Otherwise, it becomes inactive because of retirement, death or because of going abroad permanently. One needs to transfer their old PF accounts to the new ones so that the withdrawal of the money becomes easy. 

Once you find your PF account to be operative then you need to visit the PF office. You also need to show all your documents to the PF office to prove that the account belongs to you. Once you prove then you will get the amount of money from the inoperative PF account of yours.

What happens to an Inactive PF account? 

Once the PF account of yours becomes inoperative the money is kept with the EPFO for the next 7 years.  Then the money will be sent to the senior citizen welfare fund for the next 25 years if not claimed in the time period of seven years by the EPFO.   If it is still not claimed then it is assumed that the person has died or has no legal recipient and it will be sent to the central government. After this, the High Court files the petition and the person will get the PF money only if the court orders it.