Dear all
As per my earlier blog as in regards to Major 3 Latest Amendments In EPF And EDLI pls find the details in brief:-
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In brief
The Ministry of Labour and Employment, Government of India, has made a few amendments in the
Employees’ Provident Fund Scheme, 1952 (PF Scheme). These are effective from 10 February 2016.
Key implications are briefly explained below:
- Member employees will no longer be allowed to withdraw the full amount standing to their credit in the fund on cessation of employment from a covered establishment before attaining the age of retirement.
- The maximum withdrawal on cessation of employment cannot exceed an amount aggregating employee’s own contribution and interest accrued thereon. International workers (IWs) coming from a country with which India has a social security agreement (SSA) in force shall not be governed by this amendment. They can continue to withdraw the full amount standing to their credit in the fund on cessation of employment.
Subject Relevant existing Amendment made Impact provisions
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Continuity of PF
membership
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Explanation to Para 26A
provides that the employee’s
membership shall
be deemed to be terminated, if he/she withdraws full
amount of provident fund (PF) standing to
his credit on cessation of
employment (applicable to
Indian employees).
|
Explanation to Para
26A has
been
omitted.
|
Indian employees will
continue to be a member
of the fund
even if they cease to be an employee of a covered
establishment, as the
amended withdrawal
provisions
no longer allow Indian employees
to
withdraw the full
amount of PF on
cessation of employment.
|
Increase in
age-limit
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A member may withdraw upto
90% of PF balance on attaining
54 years
of age or within one
year before actual retirement, whichever is later. (Para 68NN)
|
The age now has
been increased from
54 to 57 years.
|
Members would now be
able to avail
this option
only on attaining the age of 57 years.
|
1 Notification no.
G.S.R. 158(E), dated February
10,
2016 [F.No. S-35012/5/2015-SS-II]
Subject Relevant existing Amendment made Impact provisions
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Partial withdrawal of PF on cessation
of employment
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A member who ceases to be in
employment and continues to
not be employed with a
covered establishment for at
least two months, may be
permitted to withdraw only
his own share of contribution, including interest
earned thereon.
The requirement of ‘two
months’ period referred above
shall not apply in case of
female members resigning
from the service for the
purpose of getting married or
on account of pregnancy/
child birth. (Para 68NNNN - new
insertion)
|
With the insertion
of the new
paragraph, employer’s contribution, including interest
thereon, cannot be
withdrawn until
retirement.
|
|
Amendment in
withdrawal
provisions
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A member may withdraw the full amount standing to his
credit in the fund:
· On retirement from service after attaining the age of 55 years, or in other
circumstances as prescribed;
· On cessation of employment and not being re-employed
for at least two months
(Para 69 applicable to Indian
employees)
|
·
The age of
retirement has now
been increased from
55 to 58 years.
· Option of full withdrawal
on cessation of employment has
been
done away with.
|
The retirement age for full withdrawal in case of Indian employees
has been aligned with that of IWs. (IWs are governed by a
special provision related to withdrawal of PF)
|
The
amendments introduced in the PF scheme will have a wide impact on Indian employees as they will no longer be allowed to withdraw the entire PF
contribution on cessation of
employment. While this will help
members to
build funds for their retirement, at the same time, long
term
availability of funds to the PF authorities might result in better returns for the members.
IWs
from SSA countries will not
be
affected on account of these changes;
they can apply for a full
withdrawal of their PF contribution on cessation of their employment.
Companies may consider updating their employees on
these changes by circulating the
alert among them.
