In a major move that will benefit crores of its subscribers, the Employee Provident Fund Organisation (EPFO) has allowed its members to withdraw 75 per cent of their total provident fund after one month from the cessation of service. This has been done to enable the subscribers meet their financial commitments in an event of job loss.
The members would also have an option to withdraw the remaining 25 per cent of their funds and go for the final settlement of account after completion of two months of unemployment under the new provision in the Employee Provident Fund Scheme 1952. This decision has come into effect after a Central Board of Trustees’ meeting of EPFO, said a PTI report.
“We have decided to amend the scheme to allow members to take advance from their accounts on one month of unemployment. They can withdraw 75 per cent of their funds as an advance from their accounts after one month of unemployment and keep the account with the EPFO,” Labour Minister Santosh Kumar Gangwar, who is also the Chairman of EPFO’s Central Board of Trustees, said after the meeting.
At present, in case of unemployment, a subscriber can withdraw his or her funds after two months of unemployment and settle the account at one go. The minister was of the view that this new provision would give an option to the members to keep their account with the EPFO, which they can use after regaining employment again, and at the same time retain the social security on the remaining account.
Before this, the EPF scheme 1952 allowed the final withdrawal after two months from the date of cessation of employment of the member, as a result of which members used to withdraw an entire amount, leading to the closure of the account and no social security cover for the subscribers. Earlier, it was proposed that the members would be allowed to take 60 per cent of funds as an advance on unemployment for not less than 30 days. But the CBT (central board of trustees) raised the limit to 75 per cent in the meeting held on Tuesday.
The minister further said, “We approved almost the entire agenda listed for the meeting of the CBT today. We have also given an extension of one year to ETF (exchange-traded funds) manufacturers SBI and UTI Mutual funds till July 1, 2019. We have also extended the term of fund managers till December 31, 2018. 15% of the EPFO corpus in equity would soon translate into Rs 1 lakh crore, as it has already invested Rs 47,431.24 crore till May end this year, earning a return of 16.07 per cent.”