Currently, in the case of unemployment, a subscriber can withdraw his or her funds after two months and close the account. The EPFO has over 4.5 crore members.
The Labour Minister and Chairman of the Central Board of Trustees (CBT), Santosh Kumar Gangwar, told reporters here that 75 per cent of the accumulated funds can be withdrawn after a month of losing a job. “Twenty-five per cent has been left so that the account remains operational, but that can also be withdrawn after two months,” he said.
The CBT is a statutory body constituted by the Central government, and responsible for administering the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and three schemes, the Employees’ Provident Fund (EPF), the Employees’ Pension Scheme (EPS) and the Employees’ Deposit Linked Insurance Scheme.
Helping those laid off
After the meeting, Gangwar clarified that once the remaining 25 per cent is also withdrawn, the account will be closed.
The new arrangement aims to help an individual handed a pink slip to have some sort of financial security before he or she gets a new job.
Gangwar also announced that investment in Exchange Traded Funds (ETF) is likely to touch one lakh crore soon. However, it is still less than the 15 per cent investment limit on equity and equity related instruments.
At present, the EPFO’s corpus is more than ₹10 lakh crore. The EPFO has been making an investment in ETFs of SBI Mutual Fund and UTI Mutual Fund besides the CPSE ETF and Bharat 22 ETF.
From August 2015 to May 31, 2018, a total of ₹47,431 crore was invested in various ETFs, which gave over 16 per cent return.
The CBT has decided to extend the tenure of two fund managers, SBI MF and UTI MF by one more year, up to June 30, 2019.
It also approved a proposal to expand the list of equities for investment. Existing regulations say investment can be made in equities belonging to the Sensex 30 and Nifty 50 benchmark indices. Now, another 30 scrips beyond will be eligible for investment by the EPFO.
Meanwhile, there is no word on enhancing the pension limit to ₹2,000 from ₹1,000. Though this item was not part of the agenda circulated for the meeting, it was expected to be taken up with permission from the chair.
Source: The Hindu