The provident fund body, EPFO has announced path-breaking decisions during the 238th meeting of Central Board of Trustees (CBT). Among which is the simplifying, expedite and transparent withdrawals for employees provident fund (EPF) and employees pension scheme (EPS) accountholders. Apart from this, the Labour Ministry signalled that the Cabinet is looking into the proposal of minimum pension hike under EPS 1995 scheme.

EPF partial withdrawal provisions:

During the 238th meeting, CBT simplified the partial withdrawal provisions of EPF Scheme by merging 13 complex provisions into a single, streamlined rule categorized into three types namely, Essential Needs (illness, education, marriage), Housing Needs and Special Circumstances.

That being said, now members will be able to withdraw upto 100% of the eligible balance in the Provident Fund including employee and employer share.

Apart from this, CBT has liberalized withdrawal limits — especially for education withdrawals which is now allowed up to 10 times and marriage up to 5 times (from existing limit of total of 3 partial withdrawals for marriage & education in all).

Also, requirement of minimum service has been uniformly reduced to only 12 months for all partial withdrawals.

The CBT also announced provision for earmarking 25% of the contributions in the Members’ account as Minimum Balance to be maintained by the member at all times. This will enable the member to enjoy high rate of interest offered by EPFO (presently 8.25% pa) along with compounding benefits to accumulate a high value retirement corpus. This rationalization enhances ease of access while ensuring members maintain a sufficient retirement corpus.

“Scheme provision simplification along with greater flexibility and zero need for any documentation will pave the way for 100 % auto settlement of claims for partial withdrawal and ensure ease of living,” it said.

Additionally, CBT decided to change the period for availing premature final settlement of EPF from the existing 2 months to 12 months and final pension withdrawal from 2 months to 36 months.

EPS Scheme New Update:

Furthermore, in a major good news, CBT okayed MoU with India Post Payments Bank (IPPB) to provide doorstep Digital Life Certificate (DLC) services to EPS’95 pensioners at a cost of Rs 50 per certificate, fully borne by EPFO.

CBT said, “This initiative will allow pensioners, especially in rural and remote areas, to submit their life certificates from home through IPPB’s vast postal network, free of charge.”

The move is expected to enhance ease of living for elderly pensioners, ensure timely pension continuity, enable quicker family pension initiation and improve accuracy under the Centralised Pension Payment System (CPPS).

EPS Minimum Pension Hike?

When asked about the proposal for hiking minimum pension, the Labour Ministry has not ruled out the possibility.

A CBT member told The Hindu after the meeting, “The Minister did not rule it out and said the Cabinet is actively considering the proposal.”

Pensioners and employees union have been hoping for minimum pension under EPS to be hiked as soon as possible. The ministry is aware of the matter for quite sometime now. There are many expectations of minimum pension to increase to either Rs 2,500 or Rs 7,500 from the current Rs 1,000.

The EPS, 1995 is a “Defined Contribution-Defined Benefit” Social Security Scheme. The corpus of the Employees’ Pension Fund is made up of (i) contribution by the employer @ 8.33 per cent of wages; and (ii) contribution from Central Government through budgetary support @ 1.16 per cent of wages up to an amount of Rs.15,000/- per month, as per government website.

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