Centre increases provident fund withdrawal period to 12 months, pension to 36 months

The Union government has increased the period for the final settlement of provident funds to 12 months from two months.

On Monday, the Union Ministry of Labour and Employment announced that members of the Employees’ Provident Fund Organisation will now be able to apply for full withdrawal of funds from their provident fund accounts only after 12 months of being unemployed.

Similarly, withdrawal from the pension accounts will be allowed only after 36 months. Final pension withdrawals are currently allowed after two months of unemployment.

A member of EPFO who has been unemployed for at least one month is allowed to withdraw up to 75% of their provident fund balance under the present rules. Those who remain unemployed for two consecutive months are allowed to withdraw the entire balance.

The decision to amend the scheme was taken by the apex decision-making body of the EPFO, the Central Board of Trustees, headed by Union Labour Minister Mansukh Mandaviya, on Monday.

In a statement after the meeting, the ministry stated that members will be required to maintain 25% of the funds in their provident fund accounts as minimum balance “at all times”.

“This will enable the member to enjoy high rate of interest offered by EPFO (presently 8.25% per annum) along with compounding benefits to accumulate...

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