EPFO members now have a new option to transfer their PF amount to their pension account. Under the new scheme, members will only be able to withdraw the full amount after being unemployed for 12 months and 36 months. A minimum of 25% of the amount must always be kept secure in the account. This change will benefit approximately 30 crore members.
EPFO: Under the new scheme, members of the Employees' Provident Fund Organisation (EPFO) can now transfer their PF and pension amounts to their pension account. It was decided in a meeting of the Central Board of Trustees that members will only be able to withdraw the full amount after being unemployed for 12 months (for PF) and 36 months (for pension). A minimum of 25% of the amount will always remain secure in the account, while the remaining 75% can be withdrawn up to six times a year. According to Labour Minister Mansukh Mandaviya, this change will benefit around 30 crore members and help them build a better fund for retirement.
What are the New Rules
The Central Board of Trustees of EPFO has amended the membership rules. According to the new rules, members will only be able to withdraw their full PF and pension amounts if they remain unemployed for 12 months and 36 months, respectively. Furthermore, every member must always maintain a minimum of 25% of the amount in their PF account.
Labour and Employment Minister Mansukh Mandaviya stated that previously, members could withdraw the full amount after two months of continuous unemployment, and there was no minimum balance condition. Under the new rule, 25% of the amount will now always remain secure in the account, and the remaining 75% can be withdrawn up to six times a year.
Reason for the Change
The government made this change because approximately 87% of EPFO members have less than Rs 1 lakh in their accounts at the time of settlement. This change will ensure that members have sufficient funds available at the time of retirement.
It was decided in the board meeting held on Monday that members would be provided with the facility to withdraw money periodically when needed, but the security of their retirement fund would also be ensured.
Key Points Related to the Change
- The full PF and pension amounts can only be withdrawn after being unemployed for 12 months and 36 months, respectively.
- A minimum of 25% of the amount will always remain secure in every member's account.
- The remaining 75% of the amount can be withdrawn up to six times a year.
- The option to transfer the PF amount to a pension account will be available.
- Approximately 30 crore EPFO members will benefit from this change.
Option to Transfer PF to Pension
According to the new rule, members can now transfer their PF amount to their pension account. This step will help members build a better retirement fund in the long term, with the benefit of an 8.25% annual interest rate and compounding.
Mandaviya stated that this change will benefit approximately 30 crore EPFO members. It will make it easier for them to plan their retirement funds and ensure financial security.
Easy Access to Funds and Retirement Security
The government states that this step will provide members with easy access to funds when needed. Additionally, it will ensure that members always have sufficient savings for retirement.
According to experts, this new rule will strengthen members' financial management. Members can withdraw money as per their needs, but the security of their retirement fund will remain intact.
