Provident Fund Organisation (EPFO) on Tuesday allowed its members to withdraw 75 percent of their provident fund balance after one month of quitting the job. In addition to this members are now even eligible to withdraw the full amount and close their provident fund account. But this is possible only after two months of quitting the job.
The decision was taken on Tuesday at the 222nd Central Board of Trustees meeting of EPFO held under the chairmanship of Union Minister of State for Labour and Employment Santosh Kumar Gangwar. EPFO is the retirement body Employee’s Provident Fund Organisation which governs and take care of the Employee’s Provident Fund (EPF) scheme that’s available to all salaried employees in India. For any company with over 20 employees, it is must to register with the EPFO.
The decision of 75% withdrawal from the PF account has been taken in the interest of employees who used to face difficulties in running their households after their job loss. The decision will even help the employees to meet any of their financial needs apart from household expenses. However, the withdrawal of 100% funds from the PF account was existing since long and EPFO has decided to continue this.
The EPF Scheme 1952, allows its members to withdraw the final amount after two months from the date of cessation of employment, as a result of this many members end up withdrawing the entire (100%) amount. Complete withdrawal leads to the closure of the account and hence, no social security cover for those members. As the new change allows 75% withdrawal after this month, this way even after withdrawal of 75%, 25% will be remaining in the member’s account, this way the account will also continue and there is no end of social security as well.
In addition to this, Central Board of Trustees (CBT) has also decided to extend the term of SBI Mutual Fund and UTI Mutual Fund. The two fund managers for EPFO investment was earlier due to end on June 30, 2018. This has been now extended by one year to July 2019.
Apart from withdrawal when unemployed either for one or two months, the EPFO members are also allowed to withdraw their PF funds for some important things such as for the purchase or construction of the house, repayment of a loan, for marriage – it can be of- self, daughter, son, brother. The withdrawal is also permitted for medical treatment of family member. All this is possible as per the provisions of Employee Provident Fund Scheme 1952. However, for the different type of partial withdrawal, there are certain terms and condition and the amount which can be withdrawn is also fixed.