In a move that would bring cheers to Employees’ Provident Fund Organisation (EPFO) members, the Government has decided to permit full withdrawal of EPF corpus for purchase of house, medical treatment for self and family members, education of children in medical, dental and engineering colleges and for child’s marriage.
The Ministry of Labour has also put on hold till August 1, 2016, its notification placing withdrawal restrictions which was due to come into effect from May 1. The move has come after opposition from union representatives in the Central Board of Trustees of the EPFO.
FeMoney had reported on April 12 that the government might reconsider its stand to place restrictions on withdrawal and would allow EPFO members to retain rights over the entire accumulated EPF corpus including own contribution, contribution of employers and accumulated interest.
The labour ministry had earlier proposed that if a member is below 58 years, and employed, he or she will be allowed to to withdraw only own contributions lying in the fund and the accrued interest on that and not the entire corpus. The new norms have proposed retirement age for provident fund purposes as 58 years against the earlier 55 years. This meant that the member would not be allowed to withdraw the employer’s contribution and the interest accrued until attaining 58 years.
“This is welcome measure. We were opposed to the move to allow EPFO to hold back a member’s money,” D L Sachdeva, General Secretary, All India Trade Union Congress (AITUC) and member, Central Board of Trustee, EPFO told FeMoney.
As per existing rules on withdrawal of EPF, a subscriber has to be out of job for at least two months to seek withdrawal of his provident fund accumulation. EPFO corpus is created through a 12 per cent contribution from the employee’s salary along with a matching contribution from the employer and the interest accrued on the entire money.