Now, you can’t take out all of your PF while switching jobs
Employees would however, be able to withdraw their entire savings from the fund at any point if they cite any of the notified emergency situations including medical treatment, marriage or repayment of a housing loan.Updated: Feb 28, 2016 01:30 IST
People between jobs will only be able to withdraw their contribution in their provident fund deposits and not the entire amount, according to a change in rule that came into effect earlier this month.
Employees will, however, be able to withdraw their entire savings from the fund at any point if they cite any of the notified emergency situations, including medical treatment, marriage or repayment of a housing loan.
Additionally, women employees can withdraw the money on grounds of childbirth.
The rule is aimed at ensuring that employees are left with a substantial amount in their account at retirement, an official at the Employees’ Provident Fund Organisation — the retirement fund body under the government — said.
Under the older rules, provident fund subscribers could withdraw their savings if the gap between two jobs was two months or more.
The new rule means employees can only withdraw the contribution made — 12% of the basic salary — and interest earned on it.
They cannot touch the matching contribution made to the fund by the employer under the law.
The EPFO has also capped the withdrawal of the PF money till one attains the age of 57 as against the earlier 54 years.
As per the earlier norms, EPFO subscribers were allowed to claim 90% of their accumulations in their PF account at the age of 54 years.
This clause was relevant earlier as there were some establishments where retirement age was 55 years or 56 years, an official said, pointing that it had survived despite an increase in the retirement age to 58 years.
AK Padmanabhan, president of Left-affiliated Centre of Indian Trade Unions (CITU), suggested the trade unions did not mind the restrictions since “it will ensure PF money is used as post-retirement security and not for any other purpose”.
First Published: Feb 28, 2016 01:29 IST