EPFO proposes to cap PF withdrawal at 75% before the retirement age of 58
Updated: Jul 07, 2015 11:38:53am
New Delhi, July 7 (KNN) The employees will not be able to withdraw more than 75 per cent of their accumulated provident fund (PF) before reaching the retirement age of 58, as the Employees’ Provident Fund Organization (EPFO) has proposed to put a cap on complete withdrawal from any of its depositor accounts before retirement.
The move is aimed at discouraging PF withdrawal and boosting post-retirement social security benefits of workers.
“We propose to hold 25 per cent of the contribution as this fund is meant to provide social security in old age and shouldn’t be used as a bank account,” EPFO chief K K Jalan said at the side-lines of an event here on Monday.
“We have to create an incentive for keeping PF money till retirement and not withdraw it in between. We have proposed the 75 per cent cap to the labour ministry, which is expected to approve it in next 15 days,” said Jalan.
Jalan said of the 13 million claims settled every year, around 6.5 mn are for full withdrawal of the PF amount.
Meanwhile, Union labour secretary Shankar Aggarwal said the ministry was considering the proposal and a change in the Employees’ Provident Fund Scheme would be required in this case.
“A change is proposed in the scheme and not the Act and, hence, the approval of Parliament would not be required,” Jalan said.
“We have to realize that EPF is not a savings bank account. It is a retirement saving and meant for social security post-retirement,” he added. (KNN Bureau)
The move is aimed at discouraging PF withdrawal and boosting post-retirement social security benefits of workers.
“We propose to hold 25 per cent of the contribution as this fund is meant to provide social security in old age and shouldn’t be used as a bank account,” EPFO chief K K Jalan said at the side-lines of an event here on Monday.
“We have to create an incentive for keeping PF money till retirement and not withdraw it in between. We have proposed the 75 per cent cap to the labour ministry, which is expected to approve it in next 15 days,” said Jalan.
Jalan said of the 13 million claims settled every year, around 6.5 mn are for full withdrawal of the PF amount.
Meanwhile, Union labour secretary Shankar Aggarwal said the ministry was considering the proposal and a change in the Employees’ Provident Fund Scheme would be required in this case.
“A change is proposed in the scheme and not the Act and, hence, the approval of Parliament would not be required,” Jalan said.
“We have to realize that EPF is not a savings bank account. It is a retirement saving and meant for social security post-retirement,” he added. (KNN Bureau)
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