EPFO members now allowed to withdraw 100% of eligible EPF savings, All details here
Employees’ Provident Fund Organisation (EPFO) now allows members to withdraw up to 100 per cent of eligible balance in their Provident Fund (PF) accounts.
Employees’ Provident Fund Organisation (EPFO) members can now withdraw up to 100 per cent of eligible balance in their Provident Fund (PF) accounts. This will be applicable for both the employee and employer contribution.
Earlier, EPFO had allowed its members to withdraw only 75% of their PF balance at first then the remaining 25% could be taken after two months. Meanwhile, full withdrawal was only allowed in case of retirement or unemployment.
For partial withdrawals, members could take up to 90% of their account balance for purposes like buying land, building a home or repaying a housing loan.
With the new decision, EPFO members now withdraw the full eligible balance, covering both employee and employer contributions when needed.
The decision was taken at the 238th meeting of the Central Board of Trustees (CBT) held in New Delhi. The meeting was chaired by Labour Minister Mansukh Mandaviya. As many as 13 rules for withdrawals have been consolidated to three categories: essential needs such as illness, education, or marriage, housing needs and special circumstances such as unemployment, epidemic, or natural calamity in this meeting.
Partial withdrawal rules simplified
The PF withdrawals limits for education have been relaxed up to 10 times and for marriage up to five times, which was earlier set with a combined cap of three. Moreover, the organization has also reduced the minimum service requirement for all partial withdrawals to just 12 months.
No clarification needed for Special Circumstances cases
EPFO members has also been relieved of providing reasons for partial withdrawals under the “Special Circumstances.” Previously, members had to give reasons such as natural disasters, unemployment, factory closures or epidemics. Now, withdrawals under this category can be made without stating any reason. The simplified rules will reduce reduce claim rejections and improve ease of access.
25 per cent minimum balance
A new rule also mandates maintaining 25 per cent of contributions as a minimum balance, allowing members to continue earning the 8.25 per cent annual interest with compounding benefits, helping them preserve a healthy retirement corpus.
Pension withdrawal
Additionally, the period for availing a premature final settlement of EPF has been extended from two months to 12 months, while final pension withdrawal is now allowed after 36 months.
Vishwas Scheme
EPFO has introduced the Vishwas Scheme, which reduces penal damages for delayed PF payments to a flat 1 per cent per month, with lower rates for shorter delays. The scheme, effective for six months and extendable by another six, covers both pending and pre-adjudication cases.
Moreover, the organization has also launched a member-centric digital framework under EPFO 3.0, which offers an integrated service of core banking, cloud-based systems, and multilingual self-service tools.
EPFO has also partnered with India Post Payments Bank (IPPB) to offer doorstep Digital Life Certificate (DLC) services to pensioners, particularly benefiting those in remote areas.
Now, four fund managers, SBI Funds Management, HDFC AMC, Aditya Birla Sun Life AMC, and UTI AMC, will be appointed to ensure prudent fund management. These four managers will manage debt portfolio for five years.
