EPFO logo.
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The Central Board of Trustees (CBT) on October 13 announced a series of key decisions in regard to Employees’ Provident Fund Organisation (EPFO) including the revision of simplifying partial withdrawal provisions.
Announcing the changes, the EPFO said, "The liberalization of partial withdrawals ensures members can meet immediate financial needs without compromising their retirement savings or pension entitlements," the EPFO said.
Let's take a look at the key changes announced in the EPFO withdrawals:
1. Three types of partial withdrawals:
The CBT has simplified the 13 complex set of categories to three reasons to avail partial withdrawals.
"To enhance Ease of Living of EPF members, CBT decided to simplify the partial withdrawal provisions of EPF Scheme by merging 13 complex provisions into a single, streamlined rule categorized into three types namely, Essential Needs (illness, education, marriage), Housing Needs and Special Circumstances," EPFO said.
2. Benefit 100 per cent withdrawal:
Including employee and employer share, the latest version permits to withdraw up to 100 per cent of the provident fund balance, making employer lives easier.
3. Revised limit of withdrawals:
The withdrawal limit extended for education is 10 times and for marriage is five times where the older version allows to draw out only for three times for both the reasons.
4. Minimum service requirement:
The service requirement to avail partial withdrawal has been reduced to 12 months of experience as a minimum eligibility.
5. New minimum balance:
The CBT has instructed to maintain a minimum balance of 25 per cent their savings to earn a high rate interest of 8.5 per cent.
6. Premature final settlement and final pension withdrawal
The period for premature final settlement of EPF is up from two to 12 months and the final pension withdrawal period has been extended from two to 36 months paving way for a longer savings period.
7.Member-centric digital framework
The withdrawal rules and the digital framework for EPFO pave the way to process document-free and 100 per cent auto settled approach of EPF claims.
The new system is being evolved to avoid this time-consuming process and reduce the burden of the EPFO, as over 5 crore claims mostly for withdrawing EPF are settled every year.