NEW DELHI, Oct 13: The board of retirement fund body EPFO on Monday approved liberalised part withdrawals for its more than seven crore subscribers, allowing up to 100 per cent EPF withdrawal.
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The Central Board of Trustees (CBT), the apex decision-making body of EPFO, headed by Labour Minister Mansukh Mandaviya, took several path-breaking decisions during its meeting, a Labour Ministry statement said on Monday.
To enhance the Ease of Living of EPF members, the CBT decided to simplify the partial withdrawal provisions of the EPF Scheme by merging 13 complex provisions into a single, streamlined rule categorised into three types, namely, Essential Needs (illness, education, marriage), Housing Needs and Special Circumstances.
Now, members will be able to withdraw up to 100 per cent of the eligible balance in the Provident Fund, including employee and employer share.
Withdrawal limits have been liberalised-education withdrawals allowed up to 10 times and marriage up to 5 times (from the existing limit of a total of 3 partial withdrawals for marriage & education in all).
The requirement for minimum service has been uniformly reduced to only 12 months for all partial withdrawals.
Earlier, under ‘Special Circumstances,’ the member was required to clarify the reasons for partial withdrawals viz. natural calamity, lockouts/closure of establishments, continuous unemployment, outbreak of epidemic, etc.
This often led to rejection of claims and consequent grievances.
Now, the member can apply without assigning any reasons under this category.
A provision has been made for earmarking 25 per cent of the contributions in the Members’ account as Minimum Balance to be maintained by the member at all times.
This will enable the member to enjoy a high rate of interest offered by EPFO (presently 8.25% pa) along with compounding benefits to accumulate a high-value retirement corpus.
This rationalization enhances ease of access while ensuring members maintain a sufficient retirement corpus.
Scheme provision simplification along with greater flexibility and zero need for any documentation will pave the way for 100 per cent auto settlement of claims for partial withdrawal and ensure ease of living.
Complementing the above, it is also decided to change the period for availing premature final settlement of EPF from the existing 2 months to 12 months and final pension withdrawal from 2 months to 36 months.
The liberalization of partial withdrawals ensures members can meet immediate financial needs without compromising their retirement savings or pension entitlements. (PTI)
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