Employees’ PF account is empty
On one hand, EPFO has talked about making partial withdrawal easier, on the other hand, withdrawing the entire amount before retirement is now more strictly guarded than before. The objective of the government is clear, the employees should get money for their immediate needs but they should also save a huge amount for their future.
Money is running out even before retirement
In fact, the Central Government recently presented a figure which is enough to raise the concern of any working person. According to these figures, about 50% of the Employees Provident Fund (EPF) members have less than Rs 20,000 in their account at the time of withdrawal. About 75% of employees have less than Rs 50,000 balance in their PF account. At the same time, 87% of the members have less than Rs 1 lakh deposited even when they approach retirement. The government has clearly said that this situation shows that most of the people are not able to save enough for their old age. The habit of repeatedly withdrawing money for small needs is depleting their retirement fund. Now the rules have been changed to deal with this serious problem.
Now there will be restrictions on withdrawing money
Many major decisions were taken in the EPFO meeting chaired by Union Labor Minister Mansukh Mandaviya to promote the savings habit of employees and strengthen the retirement fund. The biggest change has been made in the rules for premature withdrawal of the entire amount.
- Minimum balance condition: Now it will be mandatory to maintain a minimum balance of 25% in every PF account. This means that you will not be able to clear your account completely.
- Long wait for complete withdrawal: If you want to withdraw your entire PF money after leaving the job, now you will have to wait for full 12 months instead of 2 months.
- Pension withdrawal even more difficult: The waiting period for withdrawal of pension fund has been increased from 2 months to 36 months i.e. three years. Officials say that this decision was necessary because 75% of the pension scheme members withdraw all their money immediately, making their old age insecure.
You will get money easily when you need it
While on one hand the government has shown strictness on emptying the funds before retirement, on the other hand it has also taken care of the actual needs of the employees. The process of partial withdrawal i.e. withdrawal of money for any special need, such as treatment, marriage or education, has already been simplified. Last year, EPFO received 7 crore applications for partial withdrawal, out of which 6 crore applications were approved. Explaining this dual strategy, a senior official said, “It’s your money, and you can withdraw it whenever you need. But the minimum balance requirement will ensure that your account remains active and earns an attractive interest of 8.25%.” The move aims to strike a balance between immediate needs and future security.
Government started ‘Employee Enrollment Campaign’
EPFO has also given a big opportunity to those employees who due to some reason could not become a part of this social security scheme till now. A new enrollment scheme is being started from November 1. This scheme is for all those employees who joined the job between July 2017 and October 2025, but could not open their PF account. Under this scheme, the employer will have to deposit the outstanding amount of the employee’s share and the interest charged on it.
However, if no deduction has been made before the employee’s salary, he will be exempted from depositing his earlier share. EPFO has imposed only a nominal fine of Rs 100 on employers who have not enrolled since 2017, without taking any major action, so that more and more people can join the scheme. The government believes that small savings can one day create a big retirement fund.