EPFO Latest News: The government intends to protect subscribers’ retirement by separating their pension and PF funds. If this rule is enforced, the subscriber will be able to take PF funds when they are needed, but the pension fund would not be affected.
EPFO’s Latest Update in New Delhi: The administration is now debating whether to split the pension and provident funds. The government’s motivation is to ensure that the employee has adequate pension funds when he retires. The Employees’ Provident Fund Organization’s formal sector employs 6 crore people, and this decision will have a direct influence on them (EPFO).
Then you won’t be allowed to take money out of your pension fund.
Let us tell you that the employee and his employer both contribute 12-12 percent or a total of 24 percent, to the Provident Fund. The Employees Pension Scheme (EPS) receives 8.33 percent of the total, while the Provident Fund receives the remaining amount. Because it is a single account, if employees withdraw money from their personal provident fund, they also withdraw money from their pension account. According to Mint, the government believes that if the pension and provident funds are separated, employees will be unable to withdraw money from the pension fund.
During the Corona epidemic, people withdrew money in large amounts.
The government’s action will be interpreted as a pension reform. This situation worsened following the Corona pandemic because lakhs of people lost their employment during that time. A total of 76.3 lakh customers have taken money from these accounts in the form of Kovid Advances as of May 31, 2021. EPFO has settled 3.9 crore claims, including Covid advances, since April 1, 2020, till June 19, 2021.
Separation of the PF and the Pension Fund is being discussed.
An official said on the condition of anonymity that it is critical for EPFO to separate its PF and pension schemes. While withdrawing money from PF when needed is not a problem, the pension account should not be touched. An internal government group had proposed that EPF and EPS accounts be separated, according to the official. This was also mentioned during an EPFO board meeting earlier this year.
According to the official, even if a subscriber withdraws money from the pension fund for whatever reason, he would notice the changing value, implying that his income will be lowered after retirement. When a subscriber breaks the pension fund, he may have to renounce certain advantages in order to avoid early withdrawal.