EPFO Update: The government is preparing to make major changes in EPFO, which runs the biggest social security scheme like Employee Provident Fund (EPF).
The minimum pension limit can be increased from the current Rs 1,000 and there is also a proposal to provide the facility of partial withdrawal from the pension fund at the time of retirement. Apart from this, there is also a proposal to make the scheme attractive for those whose monthly income is more than Rs 15,000.
Withdrawal facility through portal
Labor and Employment Minister Mansukh Mandaviya has asked the officials of the ministry and EPFO to make the system effective and attractive for the middle class and lower middle class subscribers. The government wants EPFO to be on the lines of banks and for this, major changes are being prepared in the rules. According to the Times of India report, the government wants that the facility of easy withdrawal of money for marriages, medical treatment, children’s education should be allowed through the portal itself. If necessary, the government can also change the rules on a large scale.
Financial planning option for subscribers
The labour minister has suggested making the withdrawal rules flexible at the time of retirement so that subscribers can do better financial planning and change the amount they receive annually as pension. This change will create a payout system similar to the National Pension System in which subscribers have to invest some amount in annuity and can withdraw the rest.
Preparation to increase pension to more than 1000 rupees
In the case of EPF, major changes will have to be made in the Employees Pension Scheme for higher pension after retirement. At the same time, the Labor Minister has emphasized on making the scheme more attractive for EPFO members who earn more than Rs 15000 per month. EPFO also manages the pension scheme EPS. Officials said that many changes are being discussed, which include increasing the investment limit. Currently, employees and employers invest 12 percent of the basic salary, which is invested in the Provident Fund and Employee Pension Scheme.
Use of construction workers’ funds possible
The ministry is considering tapping the funds collected by the states in the name of construction workers which are lying idle. States have a fund of about Rs 75000 crore lying with them which can be used for pension along with the Provident Fund corpus.
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