New Provident Fund rules explained: Here's what happens to your money now

Rules for subscribers of Employees Provident Fund Organisation (EPFO) have been changed to make the scheme more user-friendly. Read below to know the changes and what they mean: The current rulesCurrently, the EPF Scheme 1952 allows final withdrawal after two months from the date of cessation of employment of the member. A subscriber needs to contribute to his PF account consecutively for at least 10 years to become eligible for pension but if the account is closed prematurely, the subscriber may not remain eligible for pension.The new rules Subscribers who resign from their job can now withdraw 75% of their total provident fund kitty after one month from the date of cessation of service to meet their monthly financial commitments. Members will continue to have the choice of withdrawing the entire amount, if they want to close the account, after two months. How they helpAllowing 75% withdrawal just after a month of job loss would meet the financial requirements of the subscriber to a great extent. Moreover, the subscriber may not withdraw the remaining amount, thus ensuring he continues to get social security on the existing account. EPF Scheme 1952 does not have provision for advance to members during non-employment. It allows only full and final settlement in such events. This compels members to withdraw the entire amount. Early closure of membership goes against the objective of providing social security to the members and family and also renders a subscriber ineligible for pension. Under the new rules, subscribers can keep their accounts with the EPFO and use them after joining a new job.

from The Economic Times https://ift.tt/2tJ63he
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