Employees’ Provident Fund Organisation (EPFO) on Friday deferred till April 30, implementation of new norms that restrict 100 per cent withdrawal of provident fund by members after unemployment of more than two months, among others.
The EPFO subscribers who are out of jobs for more than two months can file for full and final settlement of provident fund till the month end.
In view of practical difficulties faced in implementation of the notifications, the new provisions will come into effect from May 1, 2016, a circular by the EPFO said.
“Accordingly, all the claims received up to April 30, 2016, are to be settled according to the provisions existing prior to the issue of the notification dated February 10, 2016,” it added.
Earlier in February, the EPFO amended the EPF Scheme 1952 to tighten the various norms for withdrawal of provident fund including increasing age limit for filing such claims by retiring employees to 58 years from 54 years.
Besides, the retirement fund body also restricted withdrawal of PF to own contribution of subscribers and interest earned on that, if the claimant has remained unemployed for more than two months. The member would be able to withdraw employer’s contribution on maturity.
It was stipulated that the requirement of two months' unemployment will not apply in cases of women members resigning from the services for the purpose of getting married, on account of pregnancy or childbirth.
According to the new norms, subscribers will not be able to claim withdrawal of PF after attaining 54 years of age. They would have to wait till attaining the age 57 years.
According to the earlier norms, subscribers were allowed to claim 90 per cent of their accumulations in their PF account at the age of 54 years and their claims were settled just one year before their retirement.
The earlier clause was relevant because there were establishments where retirement age was 55 years or 56 years.
But this will create a problem in private as well as public sector where people opt for voluntary retirement.
The big change is that now under this facility, the subscriber would be able to withdraw his contribution and interest earned on it unlike 90 per cent of the total accumulations earlier.
In another change, EPFO has made it mandatory to wait till attaining the age of 57 for claiming PF withdrawal for transferring that to the Life Insurance Corporation of India for investment in Varishtha Pension Bima Yojana.
Earlier norms used to allow subscribers to claim 90 per cent of their accumulations for investing in the scheme after attaining the age of 55 years.
All these new provisions related to PF withdrawal would be applicable from May 1, 2016.