New Delhi: An employee will now be able to withdraw 75 per cent of his Employees' Provident Fund amount after a month of unemployment and continue as a member of retirement fund body EPFO for social security benefits.
The central board of the EPF headed by labour minister Santosh Gangwar on Tuesday decided to amend the EPF scheme to allow members to continue his or her account with 25 per cent of the amount till retirement age to get pension benefits.
Now the EPF scheme allows a subscriber to withdraw his or her funds after two months of unemployment and settle the account at one go.
"When a person loses his job, he can withdraw the full amount after two months and terminate the membership of the EPFO. Now he can withdraw 75 per cent after one month. He can continue with the remaining 25 per cent. If he wants he can withdraw that 25 per cent after two months," Gangwar said.
The RSS-affiliated Bharatiya Mazdoor Sangh (BMS) welcomed the decision.
BMS general secretary Vrijesh Upadhyay said the decision had provided a social security window to the family members of a person who continues his or her EPFO membership.
"Now a member can withdraw 75 per cent and still remain in the scheme. He will be entitled to pension after retirement, which is at 58 years," Upadhyay said.
Nearly 5.5 crore employees are members of the EPF scheme. A member is entitled to pension provided there is pension contribution for at least 10 years. The minimum pension is Rs 1,000 a month now. Higher pension is dependent on the length and amount of the contribution in the members' account.
A lot of final withdrawals of claims are filed by the members even before attaining the retirement age, which results in cessation of EPF membership. Most of the cases of early settlement are attributed to job loss.
The scheme does not have the provision of an advance to members during the period of non-employment. It allows only full and final settlement.
The permission for 75 per cent withdrawal is likely to encourage many members to continue with the account to receive pension.