Employees’ Provident Fund Organisation (EPFO) members will now be able to withdraw their full PF and pension amounts only if they remain unemployed for 12 months and 36 months, respectively.
The EPFO ‘s Central Board of Trustees, chaired by Labour and Employment Minister Mansukh Mandaviya, has also stipulated that each member must maintain at least 25% of their PF balance in their account at all times.
Earlier this rule was of EPFO
Until now, the rule was that any member could withdraw their entire balance after two months of continuous unemployment, and there was no minimum balance requirement. Minister Mandaviya said on Tuesday that now 25% of the total amount will be kept in the account at all times, and the remaining 75% can be withdrawn up to six times a year.
Changes to this plan were made at a board meeting on Monday. According to the new plan, members will have the flexibility to withdraw funds periodically if needed, but a certain amount will always be secured for their retirement. This rule was introduced because 87% of members have less than ₹1 lakh in their accounts at the time of settlement.
30 crore EPFO members will benefit
Mandaviya explained that members can also transfer their PF funds to a pension account if they wish. The Labor Ministry believes this change will benefit approximately 300 million EPFO members. It will help them build a better retirement fund with the EPFO’s 8.25% annual interest rate and the benefit of compounding.
The government says the move will give members easier access to money, but also ensure they have adequate savings for retirement.
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