A Unique Case of Changing Salary—and Changing Rules
It’s not every day that a job change involves a salary drop—especially when it creates confusion for the system that manages your retirement savings. That’s exactly what happened when our client switched from Trafigura to Nomura, sparking a rare EPFO issue that most people (and even employers) aren’t aware of. Here's what went wrong and how we fixed it.
The Problem: EPS Confusion Due to a Salary Drop
Here’s how it unfolded:
- At Trafigura: The client’s salary was above ₹15,000, so there were no EPS contributions (since EPFO rules state that employees earning above ₹15,000 are not eligible for EPS).
- At Nomura: The client’s new salary was ₹15,000, and his employer started deducting EPS.
The Twist:
When we initiated the PF transfer, EPFO flagged an issue:
- "EPS member found in current employment, but no EPS details received from previous employer."
EPFO's system expected to see EPS details from Trafigura, but there were none—because the client was not an EPS member there. This raised a red flag.
Summary Table: EPS Eligibility and Contributions
Adding to the Confusion: Overlapping Employment Dates
There was also an issue with overlapping employment dates:
- Trafigura's Date of Exit (DOE): 1st July 2020
- Nomura's Date of Joining (DOJ): 8th June 2020
According to EPFO rules, the DOE at your previous job must be at least one day before the DOJ at the next job. This caused a mismatch in the system
Client’s Goal: The client wanted to withdraw the maximum possible amount from his PF balance, which required resolving the EPS mismatch and correcting the Date of Exit (DOE).
Solution We Provided:
Phase 1: Correction of Date of Exit (DOE)
- Action Taken: The DOE was marked with clarification to resolve the issue.
Phase 2: Resolving the EPS Mismatch
- Action Taken: We provided proof of service record from Trafigura confirming the client wasn’t an EPS member. The necessary documentation was submitted to EPFO to clarify the updated EPS eligibility under the new employer.
Phase 3: PF Transfer
- After correcting the DOE and EPS status, the PF transfer was successfully processed from Trafigura to Nomura.
Phase 4: Advance Withdrawal for Maximum Amount
- Given the client’s urgent need, we initiated an advance withdrawal to access almost 90% of his total PF balance, after the transfer process.
Conclusion:
This case highlights a unique situation where the overlap in employment dates and salary changes led to confusion in EPFO’s system. By addressing the EPS mismatch and correcting the DOE, we were able to facilitate the transfer and initiate an advance withdrawal. This ensured that the client could access nearly 90% of their PF balance while the technicalities were being resolved. The process, though complicated, was successfully navigated with strategic steps and clear communication with EPFO.
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