EPFO New Rules: Almost all employed people in the country have a PF (Provident Fund) account. Every month, employees contribute 12 percent of their salary, and the company contributes an equal amount. This way, a fixed amount is secured every month for the employee’s future.
It also earns good interest. This amount becomes a financial support for them after retirement or after leaving their job. But now the Employees’ Provident Fund Organization (EPFO) has changed a major rule. This will now make it take longer for people to withdraw their PF. Learn about the new rule.
Now I have to wait for so many months
Previously, if a person quit their job, they could withdraw their entire PF balance after two months of unemployment. This meant that full withdrawal was available within just two months. However, the EPFO has now amended this rule and extended this period. Under the new rule, a member will now have to wait a full 12 months after leaving their job.
Only then will they be able to withdraw the full amount from their PF account. However, partial withdrawals, up to 75 percent of the amount, in the event of unemployment, remain permitted. The EPFO says this change has been made so that employees don’t compromise their pension and future financial security. Previously, people would withdraw the entire amount upon losing their job, which would affect their pension eligibility.
It will be easier for the employees
The EPFO has also simplified the process for PF withdrawals. Previously, when an employee retired or wanted to withdraw their funds after leaving their job, they had to submit numerous documents. This required attaching identity proof, bank details, and other documents with the application. Under the new rules, this will no longer be necessary.
This means that employees will be able to withdraw their PF without providing any documentation or reason. The EPFO says this change was made for the convenience of employees, ensuring they have easy access to their funds after retirement or unemployment.
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