Mach,
The provident(retirement) fund consists of 3 accounts. A account, the one EK contributes the 12% into from the day you join. B account, the one you contribute 5% of your base salary into(mandatory) and then a C account, which is a voluntary only account which you contribute to with no matching from the company, a savings plan if you wish.
Also note that company 12% is on base salary and does not include flying pay.
Here's where the 7 years comes into action. The A account will not be fully vested until 7 years, after 5 years I think you get 75% of its value and for time before that a ratio of your monthly salary x the number of years of service.
There are more in depth details but that's the jist of it.