By Admin 
EPFO New Rule: Employees’ Provident Fund Organization (EPFO) has changed the deadline for premature final settlement of provident fund and pension accounts. Now the rules have become stricter than before. Under this, EPFO subscribers can now apply for final settlement only after 12 months of leaving the job, whereas earlier this deadline was two months. Similarly, now pension withdrawal will be allowed after remaining unemployed for 36 months.
What are the rules now?
At present, if a member is unemployed for at least one month, he can withdraw up to 75 percent of the EPF balance from his PF account. Under Article 69(2) of the EPF scheme, a member who remains unemployed for two consecutive months is allowed to withdraw his entire EPF balance.
Regarding EPF withdrawal, Union Minister Mansukh Mandaviya said that in case of job loss, up to 75 percent of the amount in the Provident Fund can be withdrawn immediately. The remaining 25 percent amount, which has been fixed as the minimum balance, can be withdrawn after one year of leaving the job. He said that keeping in mind the convenience of the members and their security after retirement, it has been decided to make partial withdrawal simple and liberal.
Why is it important to maintain minimum balance?
Barring special circumstances, at least 25 percent minimum balance will have to be maintained in the EPF account so that the members continue to get the benefit of high interest rate and compounding, which is 8.25 percent annually.
This is also an advantage
One advantage of this change is that earlier members had to give reasons for partial withdrawal such as being unemployed or any natural disaster or closure of a company or institution, etc. Now members will not have to give any reason or submit any documents along with the application. This has made partial withdrawal much easier than before.
Why was this change considered necessary?
Earlier, if an EPFO subscriber remained unemployed for 2 months, he could withdraw his entire PF and pension amount. Now when he gets a new job and then joins EPFO, he faces problems in the matter of pension. Actually, for pension it is necessary to have at least ten years of job experience. Now when people withdraw all the money after losing their first job, it breaks the cycle. Since the tenure of both the previous job and the new job cannot be added, one has to complete ten years of service again in the new job. In such a situation, if someone remains unemployed not just for one or two months, but for the entire 12 months, then he will be allowed to withdraw the entire amount of PF, understanding that he needs the money.
Rules regarding pension amount also changed
In the meeting of the Central Board of Trustees of EPFO, Labor Minister Mansukh Mandaviya also decided new rules regarding pension amount. Similarly, now the pension amount will also be able to be withdrawn in 36 months instead of 2 months. This means that now people may have to wait longer than before to withdraw PF money. This will also fulfill the financial needs and there will be no worry about financial security after retirement.
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