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Government rolls back stricter PF withdrawal norms

Press Trust of India
20th Apr 2016
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Earlier in February, the EPFO had amended the EPF Scheme 1952 to tighten the various norms for withdrawal of provident fund including increasing age limit for filing such claims by retiring employees to 58 years from 54 years. Besides, the EPFO had also restricted withdrawal of PF to own contribution of subscribers and interest earned on that, if the claimant has remained unemployed for more than two months. The member would be able to withdraw employer's contribution on maturity.

Source : moneypalm
Source : moneypalm

Earlier norms used to allow subscribers to claim 90 per cent of their accumulations for investing in the scheme after attaining the age of 55 years. In its statement, the Union Labour Ministry said the amendment was carried out

With the consent of trade unions and with the intention of promoting a decent accumulation of provident fund for the members at the end of their working lifetimes. However, considering the representations received from various quarters and after consultations with the various stakeholders... the government has decided to withdraw the said February 10, 2016 notification with immediate effect," it said.

The objective of the notification was to provide a minimum social security to the workers at the time of retirement, the Ministry said, adding that it was noticed that over 80 per cent of the claims settled by EPFO belonged to pre-mature withdrawals of funds, treading the EPF accounts as savings accounts, and not a Social Security Instrument.

The revised rules would have allowed an employee to withdraw his or her own share from the fund (which is 12 per cent of the wages), but the employer's share of contribution towards the PF (which is 3.67 per cent of wage) could have been withdrawn only at the age of retirement at 58 years.


Also read : Budget 2016 is just short of being a blockbuster for startups


Revolting against the news thousands of garment workers in Bengaluru clashed with the police and set buses and cars on fire today, angry with the government over the controversial new rule for provident funds, which has now been withdrawn.

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