Dear friends,
Just i need explanation of below EPF Amendment point number 1 dated on 25-02-2016(http://www.epfindia.com/site_docs/PDFs/Circulars/Y2015-2016/Coord_Amend_Para68_40761.pdf). That is "the central board, the commissioner, or any officer subordinate to him, may on a application made by a member in such form as may be specified, authorise payment to him from his provident fund account not exceeding his own total contribution including interest thereon up to the date the payment has been authorised on ceasing to be an employee in any establishment to which the act applies.
Regrds
Karthik.M
From India, Erode
1Just i need explanation of below EPF Amendment point number 1 dated on 25-02-2016(http://www.epfindia.com/site_docs/PDFs/Circulars/Y2015-2016/Coord_Amend_Para68_40761.pdf). That is "the central board, the commissioner, or any officer subordinate to him, may on a application made by a member in such form as may be specified, authorise payment to him from his provident fund account not exceeding his own total contribution including interest thereon up to the date the payment has been authorised on ceasing to be an employee in any establishment to which the act applies.
Regrds
Karthik.M
From India, Erode
Dear All,
Please find attached the GoI Notifications amending the EPF and MP Act. It has strong effects and the comments are as follows.
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Full EPF balance cannot be withdrawn (limit on early PF withdrawals)
o Existing Rule : The EPF members (employees) can withdraw the full EPF balance after 60 days of unemployment. (The EPF balance consists of employee’s contributions + employer’s contributions + interest amounts)
New Rule : The EPF members can not withdraw full PF amount 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. The employee can withdraw his contributions + interest portion only. The employer’s portion can be withdrawn after attaining the retirement age (58 years).
Continuity of EPF membership
o Existing Rule : If an employee withdraws full EPF amount after resigning from the job, his/her PF membership is deemed to be terminated. That means he/she is not a member of EPF scheme after the full withdrawal.
New Rule : An employee can only withdraw his share on resigning from the job. The employee cannot withdraw full EPF amount before attaining the retirement age. So, the employee will still be the member of EPF even if the employee ceases to be an employee of an EPF covered establishment. I believe that concept of ‘In-operative EPF a/c‘ may cease to exist.
Retirement Age
o Existing Rule : The retirement age is considered as 55 years.
New Rule : The age of retirement has now been increased from 55 to 58 years.
EPF Withdrawal provisions
o Existing Rule : Employee can withdraw the full PF amount on retirement from service (55 years) or on cessation of employment and not being employed for at least 60 days.
New Rule : As discussed above, the retirement age has now been increased from 55 to 58 years and the option of full EPF withdrawal on resignation will not be allowed. Employee can withdraw his contributions + interest portion only 90% of EPF balance
o Existing Rule : Employee can withdraw up to 90% of his entire PF balance (employee share + employer share) on attaining 54 years of age or within one year before actual retirement, whichever is later.
New Rule : Employee would now be able to avail this option only on attaining the age of 57 years. The age for this purpose has now been increased from the current 54 years to 57 years.
-------------------------
Basically, the EPF savings is meant as provision for Retirement. So now EPFO has bought in sweeping changes which has stopped benefits of early withdrawl and EPF amount will be paid to the employee only when he attends 58 years of age.
HR Personnel of member mills can get all the employees properly educated over this sweeping amendment.
From India, Coimbatore
Please find attached the GoI Notifications amending the EPF and MP Act. It has strong effects and the comments are as follows.
-----------------------------
Full EPF balance cannot be withdrawn (limit on early PF withdrawals)
o Existing Rule : The EPF members (employees) can withdraw the full EPF balance after 60 days of unemployment. (The EPF balance consists of employee’s contributions + employer’s contributions + interest amounts)
New Rule : The EPF members can not withdraw full PF amount 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. The employee can withdraw his contributions + interest portion only. The employer’s portion can be withdrawn after attaining the retirement age (58 years).
Continuity of EPF membership
o Existing Rule : If an employee withdraws full EPF amount after resigning from the job, his/her PF membership is deemed to be terminated. That means he/she is not a member of EPF scheme after the full withdrawal.
New Rule : An employee can only withdraw his share on resigning from the job. The employee cannot withdraw full EPF amount before attaining the retirement age. So, the employee will still be the member of EPF even if the employee ceases to be an employee of an EPF covered establishment. I believe that concept of ‘In-operative EPF a/c‘ may cease to exist.
Retirement Age
o Existing Rule : The retirement age is considered as 55 years.
New Rule : The age of retirement has now been increased from 55 to 58 years.
EPF Withdrawal provisions
o Existing Rule : Employee can withdraw the full PF amount on retirement from service (55 years) or on cessation of employment and not being employed for at least 60 days.
New Rule : As discussed above, the retirement age has now been increased from 55 to 58 years and the option of full EPF withdrawal on resignation will not be allowed. Employee can withdraw his contributions + interest portion only 90% of EPF balance
o Existing Rule : Employee can withdraw up to 90% of his entire PF balance (employee share + employer share) on attaining 54 years of age or within one year before actual retirement, whichever is later.
New Rule : Employee would now be able to avail this option only on attaining the age of 57 years. The age for this purpose has now been increased from the current 54 years to 57 years.
-------------------------
Basically, the EPF savings is meant as provision for Retirement. So now EPFO has bought in sweeping changes which has stopped benefits of early withdrawl and EPF amount will be paid to the employee only when he attends 58 years of age.
HR Personnel of member mills can get all the employees properly educated over this sweeping amendment.
From India, Coimbatore
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Employees PF (5th Amendment) Scheme 2015.pdf