Explanation Needed for EPF Amendment
I just need an explanation of the EPF Amendment point number 1 dated 25-02-2016 (http://www.epfindia.com/site_docs/PD...ra68_40761.pdf). It states: "The central board, the commissioner, or any officer subordinate to him, may, on an application made by a member in such form as may be specified, authorize payment to him from his provident fund account not exceeding his own total contribution including interest thereon up to the date the payment has been authorized on ceasing to be an employee in any establishment to which the act applies."
Regards,
Karthik.M
From India, Erode
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1I just need an explanation of the EPF Amendment point number 1 dated 25-02-2016 (http://www.epfindia.com/site_docs/PD...ra68_40761.pdf). It states: "The central board, the commissioner, or any officer subordinate to him, may, on an application made by a member in such form as may be specified, authorize payment to him from his provident fund account not exceeding his own total contribution including interest thereon up to the date the payment has been authorized on ceasing to be an employee in any establishment to which the act applies."
Regards,
Karthik.M
From India, Erode
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EPF and MP Act Amendments: Key Changes
Please find attached the Government of India (GoI) Notifications amending the EPF and MP Act. These amendments have significant effects, and the comments are as follows.
Full EPF Balance Withdrawal Restrictions
Existing Rule: EPF members (employees) could withdraw the full EPF balance after 60 days of unemployment. The EPF balance consists of the employee's contributions, the employer's contributions, and interest amounts.
New Rule: EPF members cannot withdraw the full PF amount before reaching the age of retirement. The maximum withdrawal upon cessation of employment cannot exceed the employee’s own contribution and the interest accrued thereon. The employee can withdraw their contributions and interest portion only. The employer’s portion can be withdrawn after reaching the retirement age of 58 years.
Continuity of EPF Membership
Existing Rule: If an employee withdraws the full EPF amount after resigning from the job, their PF membership is deemed terminated, meaning they are no longer a member of the EPF scheme after full withdrawal.
New Rule: An employee can only withdraw their share upon resigning from the job. The employee cannot withdraw the full EPF amount before reaching retirement age. Thus, the employee will still be a member of the EPF even if they cease to be an employee of an EPF-covered establishment. This may lead to the concept of 'In-operative EPF account' ceasing to exist.
Retirement Age
Existing Rule: The retirement age was considered 55 years.
New Rule: The retirement age has now been increased from 55 to 58 years.
EPF Withdrawal Provisions
Existing Rule: Employees could withdraw the full PF amount upon retirement from service (55 years) or upon cessation of employment and not being employed for at least 60 days.
New Rule: As discussed above, the retirement age has now been increased from 55 to 58 years, and the option of full EPF withdrawal upon resignation will not be allowed. Employees can withdraw their contributions and interest portion only.
Existing Rule: Employees could withdraw up to 90% of their entire PF balance (employee share + employer share) upon reaching 54 years of age or within one year before actual retirement, whichever is later.
New Rule: Employees would now be able to avail of this option only upon reaching the age of 57 years. The age for this purpose has now been increased from the current 54 years to 57 years.
Basically, the EPF savings are meant as a provision for retirement. Now, the EPFO has introduced sweeping changes that have stopped the benefits of early withdrawal, and the EPF amount will be paid to the employee only when they reach 58 years of age.
HR personnel of member mills can ensure all employees are properly educated about this sweeping amendment.
Regards
From India, Coimbatore
Acknowledge(1)Amend(0)
Please find attached the Government of India (GoI) Notifications amending the EPF and MP Act. These amendments have significant effects, and the comments are as follows.
Full EPF Balance Withdrawal Restrictions
Existing Rule: EPF members (employees) could withdraw the full EPF balance after 60 days of unemployment. The EPF balance consists of the employee's contributions, the employer's contributions, and interest amounts.
New Rule: EPF members cannot withdraw the full PF amount before reaching the age of retirement. The maximum withdrawal upon cessation of employment cannot exceed the employee’s own contribution and the interest accrued thereon. The employee can withdraw their contributions and interest portion only. The employer’s portion can be withdrawn after reaching the retirement age of 58 years.
Continuity of EPF Membership
Existing Rule: If an employee withdraws the full EPF amount after resigning from the job, their PF membership is deemed terminated, meaning they are no longer a member of the EPF scheme after full withdrawal.
New Rule: An employee can only withdraw their share upon resigning from the job. The employee cannot withdraw the full EPF amount before reaching retirement age. Thus, the employee will still be a member of the EPF even if they cease to be an employee of an EPF-covered establishment. This may lead to the concept of 'In-operative EPF account' ceasing to exist.
Retirement Age
Existing Rule: The retirement age was considered 55 years.
New Rule: The retirement age has now been increased from 55 to 58 years.
EPF Withdrawal Provisions
Existing Rule: Employees could withdraw the full PF amount upon retirement from service (55 years) or upon cessation of employment and not being employed for at least 60 days.
New Rule: As discussed above, the retirement age has now been increased from 55 to 58 years, and the option of full EPF withdrawal upon resignation will not be allowed. Employees can withdraw their contributions and interest portion only.
Existing Rule: Employees could withdraw up to 90% of their entire PF balance (employee share + employer share) upon reaching 54 years of age or within one year before actual retirement, whichever is later.
New Rule: Employees would now be able to avail of this option only upon reaching the age of 57 years. The age for this purpose has now been increased from the current 54 years to 57 years.
Basically, the EPF savings are meant as a provision for retirement. Now, the EPFO has introduced sweeping changes that have stopped the benefits of early withdrawal, and the EPF amount will be paid to the employee only when they reach 58 years of age.
HR personnel of member mills can ensure all employees are properly educated about this sweeping amendment.
Regards
From India, Coimbatore
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EPF New Amendment.pdf
BENEFITS UNDER EPF.ppt