EPFO allows up to 100% withdrawals for members

The board of retirement fund body EPFO on Monday approved liberalised part withdrawals for its more than 7 crore subscribers, allowing up to 100 per cent EPF withdrawal.

The Central Board of Trustees (CBT), the apex decision-making body of EPFO, headed by Labour Minister Mansukh Mandaviya, took several path-breaking decisions during its meeting, a Labour Ministry statement said on Monday.

To enhance the ease of living of EPF members, the CBT decided to simplify the partial withdrawal provisions of the EPF Scheme by merging 13 complex provisions into a single, streamlined rule categorised into three types, namely, essential needs (illness, education, marriage), housing needs and special circumstances.

Now, members will be able to withdraw up to 100 per cent of the eligible balance in the provident fund, including employee and employer share. Withdrawal limits have been liberalised. The requirement for minimum service has been uniformly reduced to only 12 months for all partial withdrawals. Earlier, under ‘Special Circumstances,' the member was required to clarify the reasons for partial withdrawals viz. natural calamity, lockouts/closure of establishments, continuous unemployment, outbreak of epidemic, etc.

This often led to rejection of claims and consequent grievances. Now, the member can apply without assigning any reasons under this category. A provision has been made for earmarking 25 per cent of the contributions in the Members' account as Minimum Balance to be maintained by the member at all times. This will enable the member to enjoy a high rate of interest offered by EPFO (presently 8.25 per cent pa) along with compounding benefits to accumulate a high-value retirement corpus.