Employees Provident Fund Organization
Employees Provident Fund Organization (EPFO) members will now be able to withdraw their full PF and pension amount only if they remain unemployed for 12 months and 36 months respectively. The Central Board of Trustees of EPFO, which is headed by Labor and Employment Minister Mansukh Mandaviya, has also decided that every member will always have to maintain at least 25% of the amount in his PF account.
Earlier EPFO had this rule
Till now the rule was that any member could withdraw his entire amount after two months of continuous unemployment and there was no condition of maintaining minimum balance. Minister Mandaviya said on Tuesday, now 25% of the total amount will always be kept in the account and the remaining 75% can be withdrawn up to six times in a year.
Changes have been made in this plan in the board meeting on Monday. According to the new scheme, members will not only get the facility to withdraw money from time to time if needed, but at the same time some amount will always be safe for their retirement. This rule has been brought because 87% of the members have less than Rs 1 lakh in their account at the time of settlement.
30 crore EPFO members will benefit
Mandaviya said that if members wish, they can also transfer their PF amount to their pension account. The Labor Ministry believes that this change will benefit about 30 crore EPFO members. This will help them create a better retirement fund with EPFO’s 8.25% annual interest rate and the benefit of compounding.
The government says this move will not only give members easier access to money, but will also ensure they have enough savings for retirement.