The Ministry of Labour and Employment, Government of India, has made a few amendments in the Employees’ Provident Fund Scheme, 1952 (PF Scheme). These are effective from 10 February 2016. Key implications are briefly explained below:
Member employees will no longer be allowed to withdraw the full amount standing to their credit in the fund on cessation of employment ( Resignation before 58 years of age ) from a covered establishment before attaining the age of retirement from Service after attaining the age of 58 years.
The maximum withdrawal on cessation of employment ( Resignation before 58 years of age ) cannot exceed an amount aggregating employee’s own contribution and interest accrued thereon.
The amendments introduced in the PF scheme will have a wide impact on Indian employees as they will no longer be allowed to withdraw the entire PF contribution on cessation of employment ( Resignation before 58 years of age ). While this will help members to build funds for their retirement, at the same time, long term availability of funds to the PF authorities might result in better returns for the members.