Government had issued a notification dated 10th February 2016 regarding rules for withdrawal from EPF Funds by the members. Under the revised rules, the employee was permitted to withdraw the employees’ share from the fund (which is 12% of the wages). However, it was prescribed that the employers’ share of contribution towards the Provident Fund (which is 3.67% of wage) would be allowed to be withdrawn only at the age of retirement (58 years). The objective was to provide a minimum social security to the workers at the time of retirement. It was noticed that over 80% of the claims settled by EPFO belonged to pre-mature withdrawal of funds, treating the EPF accounts as savings accounts, and not a Social Security instrument.
In order to address the issues the amendment stated above was carried out with the consent of Trade Unions and with the intention of promoting a decent accumulation of provident fund for the members at the end of their working lifetimes.
However, considering the representations received from various quarters and after consultations with the various stakeholders, Minister of State (IC) Labour and Employment, Sh Bandaru Dattatreya announced that the government has decided to withdraw the said 10th February 2016 Notification with immediate effect.
Accordingly, the workers are now allowed to withdraw the entire amount from the provident fund as per existing provisions of the EPF Scheme 1952 including the employers’ share of 3.67%.
Notification No. GSR. 158(E) dated 10th February, 2016 has proposed the following Changes :-
a) Amendment in the age limits for accumulated Provident Fund Withdrawal– Amended Age Limit for Full PF withdrawal to 58 Years from 55 Years and and for withdrawal up to 90 percent the age limit was increased to 57 Years or within one Year before Actual retirement whichever is later.
b) Removal of the provision for early withdrawal of accumulated Provident Fund – Under the amended provisions members could not withdraw their full PF accumulations on the cessation of employment and on not being re-employed with an establishment which is covered under the EPF Act for a continuous period of not less than two months before making the PF withdrawal
c) Provided Option for withdrawal on cessation of employment.- Under the amended provisions Members can now apply for withdrawal (after two months of the waiting period) of their own share of PF contributions along with interest earned on their own contribution on the cessation of employment on the condition that they are not re-employed with an establishment which is covered under the EPF. The two months waiting period shall not be applicable in the case of female PF members who are resigning on account of marriage, pregnancy or child birth.
d) Removal of the provision relating to fresh membership- Under the amended provisions individuals shall remain the members of EPFS till they withdraw their full PF while under the existing provisions employees could be treated as fresh members after taking their early PF withdrawals on the cessation of employment in a covered establishment.
Employees’ Provident Fund Organisation
(Ministry of Labour & Employment, Govt. Of India)
Head Office
Bhavishya Nidhi Bhawan, 14- Bhikaji Cama Place, New Delhi — 110066
Telephone : 01126172668 Fax : 01126105549
No: Coord/3(1)2015/ Amendment Scheme Date: 19-Apr-16
To
All ACCs (Zones)
All RPFC/OICs of ROs/SROs
Subject: Gazette Notification No. GSR. 158(E) dated 10th February, 2016 for amendment in paragraph 68-NN, 68-0 and 69 and introduction of new paragraph 68-NNNN in EPF Scheme, 1952 -Reg
Sir/Madam,
Please find enclosed herewith the letter No.S-35012/5/2015-SS.ll dated 19.04.2016 on the subject cited above.
2. The competent authority has decided to withdraw the said notification dated 10.02.2016.
Yours faithfully
(M.Narayanappa)
Additional Central Provident Fund Commissioner
No.S-35012/5/2015-SS.II
Government of India
Ministry of labour & Employment
*****************
Shram Shakti Bhawan,Rafi Marg,
New Delhi,Dated the 19th April, 2016
To
The Central Provident Fund Commissioner,
Employees’ Provident Fund Organization,
Bhavishya Nidhi Bhawan,
14, Bhikaji Cama Place,
R K. Puram,New Delhi
Sub.:- Gazette Notification No. G.S.R.158(E) dated 101h February,2016 for amendment in Paragraph 68NN; 680 and 69 and insertion of new Para 68-NNNN in the EPF Scheme, 1952 – regarding.
Sir,
I am directed to refer to this Ministry’s letter of even number dated 31st March, 2016 on the subject cited above and to convey the decision of the competent authority to withdraw the notification dated 10.02.2016.
2 Necessary instruction in this regard may be issued to all concerned.
Yours faithfully,
(Manish Gupta)
Joint Secretary
