Members will continue to have the choice of withdrawing the entire amount, if they want to close the account, after two months. A decision to this effect was taken at the 222nd central board of trustees meeting of EPFO on Tuesday. “EPFO subscribers who tend to lose a job can now withdraw 75% of the provident fund money after one month,” labour minister Santosh Kumar Gangwar said after the meeting.
EPFO is of the view that allowing 75% withdrawal just after a month of job loss would meet the financial requirements to a great extent. Moreover, the subscriber may not withdraw the remaining amount, thus ensuring he continues to get social security on the existing account.
Currently, the EPF Scheme 1952 allows final withdrawal after two months from the date of cessation of employment of the member, as a result of which many members end up withdrawing the entire amount. This leads to closure of the account and no social security cover for the subscribers.
CBT, the highest decision-making body of EPFO, comprises an equal number of representatives of employees, employers and state government representatives. It is chaired by the labour minister.
“EPF Scheme 1952 does not have provision for an advance to members during such kind of non-employment, and the scheme allows only full and final settlement. This compels members to withdraw entire amount. Such early closure of membership also goes against the objective of providing social security to the members and family,” CBT agenda note said.
Source: Economic Times