EPFO Rules Change Limits Fund Access

• Full PF withdrawal now after 12 months of joblessness, was 2. Extends financial strain.
• Pension access delayed: Withdrawal after 36 months of job loss, significantly longer.
• 25% of EPF balance retained permanently, limiting access even during emergencies.

New Delhi: The Employees Provident Fund Organisation (EPFO) has reportedly approved significant changes to withdrawal rules during its recent meeting, sparking concern among salaried employees and financial

experts alike. These changes, if implemented, may restrict full access to one’s own retirement savings and delay withdrawals in critical situations.

Full Withdrawal Only After 12 Months of Unemployment

Currently, EPFO allows full withdrawal of provident fund savings after just two months of unemployment. Under the proposed change, this period will be extended to 12 months, meaning members will have to remain jobless for an entire year to access their full savings. This move could put financial strain on individuals during periods of unexpected unemployment.

Pension Withdrawals Delayed to 36 Months

Another major shift is the change in rules related to the Employees' Pension Scheme (EPS). At present, individuals can withdraw the pension amount after 2 months of job loss, but under the new proposal, this will only be possible after 36 months. The significant delay raises questions about access to one’s pension corpus during emergencies.

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25 percent EPF Must Be Retained – No Full Withdrawal?

Perhaps the most controversial provision is the requirement to keep 25 percent of the EPF balance untouched—permanently. This means that even under conditions like resignation or long-term unemployment, only 75 percent of the total EPF balance might be available for withdrawal.

Critics argue this contradicts the idea of '100 percent withdrawal under special circumstances', which has been loosely mentioned without clarity. It’s still unclear whether this rule applies only to the employee's contribution or includes the employer's share as well.

EPFO Allows 100% Withdrawal Under Liberalised Rules For Over 7 Crore Subscribers

Why This Matters

The rationale behind the 25 percent retention is to ensure a basic retirement corpus remains intact. However, many see this as a denial of access to their own hard-earned money, especially in times of financial distress. If confirmed, these rules could significantly impact financial planning for millions of Indian workers.

Further clarity from EPFO and the Labour Ministry is awaited.