Employee Provident Fund (EPF) is an important part of savings for salaried employees. Every month, some money from your salary goes into your PF account. Your employer also adds an equal amount to it. But what happens if you discover that your PF contributions have not been deposited for several years?
The missing money can affect your EPF balance, the interest you earn and, in some cases, it can affect both your retirement savings and pension benefits.
What happens if PF contributions are missing?
If contributions are missed, that money does not get added to your EPF account. So, if an employee was supposed to receive PF contributions for 12 months but the contributions were not deposited, the PF balance will not include that amount.
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For example, an employee worked for five years but PF contributions were deposited for only three years. The PF balance will not include the contributions for the remaining two years. This means the employee will have less money in the PF account than they should have.
When contributions are not deposited, the employee also misses out on the interest those contributions would have earned in all these years.
EPF is not funded only by the employee. The employer also makes a monthly contribution. So, if an employer does not deposit the required contribution, the retirement savings get affected despite the employee working and receiving a salary.
In some cases, employees may find that PF was deducted from their salary but the amount was not deposited into their EPF account. It is therefore necessary to regularly check your EPF passbook.
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A part of the employer's contribution goes towards the Employees' Pension Scheme (EPS). So, missing contributions can also create problems in an employee's pension record. So, if contributions are missing for a particular period, the employee may later face problems when their pension is calculated or when they apply for pension benefits.
So, employees should regularly check their EPF passbook and look for gaps in their monthly contributions. They should also check whether their employment and pension service details are correct. Because missing EPF contributions can mean less money in your PF account and less interest on that money.
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