The retirement fund body, concerned with the management for social security fund corpus has brought about a major policy change. It has decided to give an option to withdraw 75 per cent of the provident funds kitty after one month of unemployment to all its members.
The chairman of Central Board of Trustees, the highest decision making body of EPFO said that the amendment in scheme has been made so as to allow the members to withdraw their funds after 30 days of job loss or resignation. Even after this the employee can keep his account with the EPFO, which can be used again after getting reemployed.
The members will also have the option to withdraw the remaining 25 per cent of their total provident funds and opt for the final settlement of accounts after 2 months of their unemployment, if they wish so. The decision has been made so that the employee would be able to meet the financial needs from 75 per cent of funds following the cessation of their jobs.
If they don’t withdraw the remaining amount from their provident fund, it will help the, continue to avail the social security on the existing account itself. As of now, the EPF scheme allows the final withdrawal after 2 months of joblessness, this leads to closing down of their accounts and simultaneously the social security cover is also lost.
The early closure of account was actually the failure of objective of providing social security cover to the members and their families. The full and final settlement of accounts was not in tune with the social security measures. As a matter of exception, this shall not apply to the females who would resign from the jobs so as to get married. It could be said that these changes would further strengthen the scheme.