Good News: Millions of employees across the country will be able to withdraw 100% of their EPF accounts, Board of Trustees approves

Good News: The Employees' Provident Fund Organization (EPFO) has provided significant relief to millions of employees. Members will now be able to withdraw up to 100% of their eligible EPF account balance. This decision was approved at a meeting of the Central Board of Trustees (CBT). The new system simplifies withdrawal rules, introduces the 'Vishwas Scheme', and adds the facility of a digital life certificate. This move will provide employees with financial flexibility and faster digital services.

Good News: Millions of employees working in government and private institutions across the country will now be able to withdraw 100% of their EPF account balance. The Employees' Provident Fund Organization (EPFO) on Monday granted significant relaxation to its more than 70 million members in partial withdrawal rules. Members can now withdraw up to 100% of their eligible balance, including both the employee and employer portions. This decision was taken at a meeting of the Central Board of Trustees (CBT), chaired by Union Labor Minister Mansukh Mandaviya.

Withdrawal rules simplified into three categories

Previously, there were 13 complex provisions for partial withdrawals. Now, these have been divided into three major categories: essential needs (illness, education, marriage), residential needs, and special circumstances. The withdrawal limits for education and marriage have been reduced to 10 and 5 times, respectively. There is no longer a need to provide reasons for special circumstances, thus reducing the risk of many claims being rejected.

Changes in Service Period and Minimum Balance

The minimum service period for all partial withdrawals has been reduced to 12 months. Furthermore, members must maintain a minimum balance of 25% of their contribution amount to ensure a larger retirement corpus through higher annual interest and compounding benefits. The early withdrawal period has also been extended. The pre-maturity final settlement period has been increased from 2 months to 12 months, and the final pension withdrawal period has been increased from 2 months to 36 months.

Vishwas Scheme and Penalty Relief

EPFO has also decided to implement the 'Vishwas Scheme'. It aims to reduce penalties for delayed provident fund contributions and eliminate pending litigation. The penalty rate under this scheme will be limited to 1% per month. The term of the scheme is six months and can be extended by another six months if required.

Digital Life Certificate and India Post Payments Bank

The Central Board of Trustees has approved a Memorandum of Understanding (MoU) with India Post Payments Bank. Under this, Employees' Pension Scheme, 1995 (EPS-95) pensioners can now obtain Digital Life Certificates (DLCs) at home. The fee for each certificate will be only Rs 50, which will be borne by the EPFO.

EPFO 3.0 Initiative and Digital Transformation

EPFO also approved a framework for member-centric digital transformation to modernize provident fund services under the EPFO 3.0 initiative. This will integrate core banking solutions with cloud and API-based modules. The objective is to ensure fast, automated claims, instant withdrawals, multilingual self-service, and seamless payroll-linked contributions.

Selection of Fund Managers for Loan Portfolio

The Central Board of Trustees selected four fund managers for the EPFO's loan portfolio for five years. This was done to increase investment diversification and ensure higher returns on members' provident fund savings.

Financial Security and Modern Services

According to the Union Labor Ministry, this decision will enable EPFO members to avail modern, digital, and convenient services. The flexibility in partial and full withdrawals, digital life certificates, and diversification of investments will strengthen members' financial security. This initiative will enable EPFO to provide faster, transparent, and user-friendly services.

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