New EPFO rules: Now, withdraw 75% funds after 1 month of unemployment

New EPFO rules: Now, withdraw 75% funds after 1 month of unemployment

At present, a subscriber can withdraw his or her funds after two months of unemployment and settle the account in one go

Retirement fund body EPFO on Tuesday decided to give its members an option to withdraw 75 per cent of their funds after one month of unemployment and keep their PF account with the body. The members would also have an option to withdraw remaining 25 per cent of their funds and go for final settlement of account after completion of two months of unemployment under the new provision in the Employee Provident Fund Scheme 1952. “We have decided to amend the scheme to allow members to take advance from its account on one month of unemployment. He can withdraw 75 per cent of its funds as advance from its account after one month of unemployment and keep its account with the EPFO,” Labour Minister Santosh Kumar Gangwar, who is also the Chairman of EPFO’s Central Board of Trustees, told reporters after the trustees meet here.

At present, in case of unemployment, a subscriber can withdraw his or her funds after two months of unemployment and settle the account in one go. The minister was of the view that this new provision would give an option to members to keep their account with the EPFO, which he can use after regaining employment again. However, it was proposed that the members would be allowed to take 60 per cent of funds as an advance on unemployment for not less than 30 days. But, the CBT raised the limit to 75 per cent in the meeting held Tuesday. The minister further said, “We approved almost the entire agenda listed for the meeting of the CBT today. We have also given an extension of one year to ETF (exchange-traded funds) manufacturers SBI and UTI Mutual funds till July 1, 2019. We have also extended the term of fund managers till December 31, 2018.”

There was a proposal to give an extension of six more months to its five fund managers SBI, ICICI Securities Primary Dealership, Reliance Capital, HSBC AMC and UTI AMC for managing its corpus. The five fund managers were appointed for three years from April 1, 2015. They were given extension till June 30, 2018. The CBT has also approved the proposal to appoint a consultant for selection of portfolio managers. The minister also said that the EPFO's ETF investment would soon cross Rs 1 trillion mark as its has already invested Rs 474.31 billion till May end this year earning a return of 16.07 per cent. The EPFO has also extended the tenure of its consultant CRISIL for evaluation of the performance of fund manager till December 31, 2018.

On the widening of the range of the ETF investments by the EPFO, a CBT member said that the agenda was deferred and the board was unanimous that a call will be taken on the advise of new fund managers and consultants to be appointed shortly. It was proposed to amend the investment pattern of the EPFO to enable the body to invest in equity index ETF beyond NIFTY 50 and Sensex ETF.

The Business Standard, 27th June 2018, New Delhi