EPFO Update: The government is preparing to make major changes in EPFO, which runs the largest social security scheme like Employee Provident Fund (EPF). The minimum pension limit can be increased from the current Rs 1,000 and it is also proposed 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 15000.
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 middle class and lower middle class subscribers. The government wants EPFO to stand on the lines of banks and for this there are preparations to make major changes in the rules. According to the report of Times of India, the government wants that the facility of easy withdrawal of money for weddings, medical treatment, children’s education should be allowed through the portal only. If necessary, the government can make changes in the rules on a large scale.
Financial planning option for subscribers
The Labor Minister has suggested to make the rules of withdrawal at the time of retirement flexible so that the subscribers can do financial planning in a better way and can change the amount received annually as pension. With this change, a payout system similar to the National Pension System can be created in which the subscriber has to invest some amount in annuity and can withdraw the remaining amount.
Preparation for pension of more than Rs 1000
In the case of EPF, major changes will have to be made in the Employees Pension Scheme to get more 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 15,000 per month. EPFO also manages the pension scheme EPS. Officials said that many changes are being discussed which include increasing the investment limit. At present, the employee and employer invest 12 percent of the basic salary which is invested in the Provident Fund and Employee Pension Scheme.
Possible use of construction workers’ funds
The ministry is considering tapping the funds which are collected by the states in the name of construction workers and are lying idle. States have a fund of about Rs 75,000 crore which can be used for pension along with the provident fund corpus.
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