No curbs on withdrawals for retired persons, says EPFO

NEW DELHI: Employees’ Provident Fund Organisation’s (EPFO) move to allow withdrawals of up to 75% of the corpus will make life easier for its over 7 crore subscribers, while the norms around 25% balance are meant to ensure a healthy kitty, without imposing any restrictions on pension or PF payment at the time of retirement, a top official said.

“The idea is to empower members and repose trust. The changes are meant to pave the way for automated settlement of claims,” Central Provident Fund commissioner Ramesh Krishnamurthi told TOI.Amid concerns over the rules cleared by the central board of trustees on Monday, Krishnamurthi asserted that the rules had been changed to provide for withdrawal of PF after 12 months of continuous unemployment, which had been increased to 36 months for pension.

He said that in case of retirement of a subscriber there was no change in the withdrawal rules.Krishnamurthi said that if the money in the pension fund is not withdrawn, the family will still earn pension after the death of a member, even if there was no contribution for three years.The rules have been changed as more than half the subscribers had a PF balance of under Rs 20,000 at the time of final settlement of claims. Similarly, 75% of the Employee Pension Scheme subscribers withdrew the money within four years, while you need to stay in the scheme for 10 years to earn pension.

“People who are financially aware do not withdraw the entire balance. Those who withdraw money are unable to build a large corpus,” Krishnamurthi said. In 2022-23, 31.1 lakh EPS members forfeited their pension eligibility due to premature withdrawal without completing 10 years of service.