New PF withdrawal norms on hold

The government has announced a complete and unconditional rollback of new PF norms that barred employees from withdrawing their provident fund corpus before retirement.

Background:

Under the rules notified in February, employees were not allowed to withdraw their entire PF amount if they had quit or lost their present jobs, making it mandatory for them to wait till 58 years of age for a final settlement.

• Under the norms that now stand reversed, employees could withdraw their own share of PF savings along with the interest on them. The balance, comprising the employer’s contribution, was to be withheld by the EPFO till the employee attained 58 years of age.
• Previously, employees had been allowed to withdraw the total EPF amount before retirement for medical emergencies, to fund children’s marriage or while changing jobs.

EPF accounts are mandatory for firms hiring at least 20 employees and are funded by employees paying 12 per cent of their salary with a matching contribution from employers.