Budget expectation: Option to convert entire PF fund into pension may be available

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Jyoti
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Budget Expectations: Several steps may be announced to provide relief to EPFO ​​members. Under this, employees associated with the Employees’ Provident Fund Organization (EPFO) may be given the option to convert their PF funds into pension.

The central government is considering options to provide comprehensive benefits to the elderly under social security after retirement. Under this, employees associated with the Employees’ Provident Fund Organization (EPFO) can be given the option to convert their PF funds into pension. This will enable employees to get more pension after retirement. It is expected that the government may also make an announcement regarding social security in the budget for the upcoming financial year 2025-26.

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Sources reveal that on the instructions of the Central Government, the Ministry of Labor and Employment is already working on options to increase the scope of the social security scheme. Under the new options, many types of facilities will be provided to the workers. Workers associated with EPFO ​​will be able to convert the amount deposited in the PF fund into pension at the time of retirement.

This means that at the time of retirement, if an employee feels that he needs a higher pension in his old age, he can put the money deposited in the fund into the pension fund. This will increase the amount received as pension.

These facilities are also available

1. Interest will be available on PF fund even after retirement

Similarly, if an employee feels at the time of retirement that he has other options of income and he does not want pension on retirement at the age of 58, but wants to start pension at 60-65 or any other age, then this option will also be provided. In such a case, interest will keep accruing annually on the amount deposited in the pension fund and the pension will start being received from the age at which he wants to start.

2. Provision of lump sum deposit in PF account

The ministry wants that EPFO ​​members should be allowed to deposit a lump sum amount in their account in addition to the regular fixed monthly contribution. This option has been under discussion for a long time, but now there seems to be a consensus at many levels.

If such a facility is provided, more contribution will be deposited in the PF account. This will enable employees to keep more funds in their account under social security and get more pension on retirement.

3. Consideration of income tax exemption on additional contribution

The ministry believes that there are many people who have savings but they do not make FDs in banks because the annual interest there is only seven percent or less. Whereas, the interest on the amount deposited in the PF account is more than eight and a quarter percent.

In such a situation, if the facility of lump sum deposit is given, then people will start putting money in EPF account for future security. Sources reveal that discussions have also been held with the Finance Ministry in this regard that it should also give the benefit of income tax exemption limit on such contribution, so that people can be encouraged to put lump sum money as contribution.

4. Consider expanding the scope of IT systems

At present, work is going on to make the EPFO ​​system like banking. IT System 3.0 is likely to be completed in June, due to which people will start getting banking like facilities. Along with this, the government is also working on options related to increasing benefits under social security, which can be announced in the budget or even after that. Regular discussions are going on between EPFO ​​and Ministry of Labor and Employment regarding this.

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