The Indian government has made it easier for workers to take money out of their Provident Fund (PF).
Under the new rules, employees can start withdrawing their PF after only one year of service—down from the old requirement of up to seven years.
What has changed?
- Single, clearer rule – The 13 different partial‑withdrawal options are now combined into one simple system.
- More money available – Workers can now reclaim the employer’s contribution along with their own contributions and earned interest. In most cases, the amount that can be withdrawn is about 75 % higher than before.
- Immediate relief for the unemployed – If you lose your job, 75 % of your total PF balance (both contributions and interest) can be withdrawn right away.
- Retirement and other scenarios – Full withdrawal is possible at retirement, after 55 years of service, if you are permanently disabled, retrenched, voluntarily retire, or leave India permanently.
Why this matters for workers
- Many employees were forced to take repeated partial withdrawals that left them with a low PF balance at retirement. An estimated 50 % of members had less than Rs 20,000, and 75 % had less than Rs 50,000 when they settled.
- The new rule sets a minimum 25 % balance to stay in the fund, ensuring that workers can build a respectable retirement corpus and benefit from the 8.25 % interest earned over time.
Impact on pension plans
- The changes do not affect pension eligibility at age 58.
- To qualify for a pension, members must still complete 10 years of EPF service.
- The new rule now allows pension accumulation to be withdrawn after 36 months instead of 2, giving families up to three years of pension support after a member’s death.
About EPFO
The Employees’ Provident Fund Organisation (EPFO) manages a corpus of about Rs 28 lakh crore. The fund is known for its safety, high returns, and often tax‑free payouts, giving millions of workers confidence in their retirement savings.
These reforms aim to give workers more flexibility and stronger long‑term security in their savings and pensions.
Source: ianslive
Stay informed on all the latest news, real-time breaking news updates, and follow all the important headlines in world News on Latest NewsX. Follow us on social media Facebook, Twitter(X), Gettr and subscribe our Youtube Channel.
