 "You may soon be able to withdraw your PF using an ATM card. Here's how")
The days of taking an eternity to withdraw money from a provident fund (PF) are long gone.
The Employees’ Provident Fund Organisation (EPFO) is making efforts to improve its IT infrastructure.
It will soon introduce a new feature that will enable members to use an ATM card to withdraw money from their corpus.
Here’s all we know about the new facility.
What is EPFO’s ATM-card facility?
The retirement fund body is working towards rolling out a facility that will allow members to withdraw provident funds from ATMs.
The initiative comes at a time when the Labour and Employment Ministry is upgrading EPFO’s IT systems to streamline PF withdrawals and improve service delivery, according to ANI, which quoted Labour Secretary Sumita Dawra.
She said the IT infrastructure of EPFO will be on par with banking systems once the IT 2.1 upgrade goes live next year.
With little assistance from humans, members, beneficiaries, and insured individuals would be able to access their PF assets thanks to the tech-driven change.
“We are enhancing our IT system to simplify claim settlements. PF withdrawals through ATMs will soon be a reality,” Dawra stated.
The initiative is part of the government’s larger effort to provide social welfare and enhance living standards for India’s massive workforce, which consists of more than 64 crore economically active people.
Dawra emphasised that as part of the IT change, pointless procedures were removed , resulting in speedier claim processing.
How will it work?
Like a bank ATM card, the new system will come with a particular PF withdrawal card.
Withdrawals, however, will be limited to 50 per cent of the entire PF balance.
According to the official, EPF members should be able to withdraw from their funds by just swiping their cards after the withdrawal amount ceiling has been set.
Although EPFO makes it possible to link bank accounts to EPF accounts, it is yet unknown if this link will be used for ATM withdrawals or if a different method will be implemented.
There are already more than 70 million active contributors to EPFO.
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Who can withdraw PF?
Under the improved system, Dawra told ANI, “A claimant, beneficiary, or insured person will be able to access their claims conveniently through ATMs.”
Beneficiaries may be able to use this ATM withdrawal service in the case of a member’s death.
To facilitate this, it could be necessary for beneficiaries to connect their bank accounts to the deceased member’s EPF account.
However, one must wait for official confirmation on this.
What are PF withdrawal rules and requirements?
EPFO members are eligible to withdraw the whole amount once they reach the retirement age of 55.
One year prior to retirement, they are allowed to take out 90 per cent of the funds.
A portion of the funds may also be withdrawn by EPFO members in the case of a medical emergency, unemployment, home renovation, member, sibling, or children’s marriage, or home purchase or construction.
Notably, the claim limit is based on the reason for withdrawal.
The claim forms that can be filed from the UAN-Member interface are PF Final Settlement (Form 19), Pension Withdrawal Benefit (Form 10-C), and PF Part Withdrawal (Form 31) from the Member Interface directly.
Also, the member should have seeded his bank account details, Permanent Account Number (PAN), and Aadhaar details in the EPFO database.
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What are the other similar initiatives by EPFO?
To combat corruption, EPFO introduced auto claim settlement, which is the automatic processing of claims up to Rs 1 lakh for housing, marriage, and education without the need for human involvement.
According to officials, 25 to 30 per cent of cases are handled automatically.
Additionally, according to Indian Express, the EPFO intends to allow for flexible pension contributions. Under this plan, employees will be able to contribute more or less to the Employees’ Pension Scheme (EPS) than the current cap of 12 per cent.
“Some people might want to contribute 10 per cent of their wage towards pension, others might want to contribute 12 per cent or 15 per cent. Some people want to contribute for a certain number of years and then stop later. This flexibility has to be given somewhere to the employees and we are working in that direction,” an official was quoted as saying.
Currently, employees do not make contributions to the EPS pension plan .
Employers and employees each contribute 12 per cent of the employee’s base salary, dearness allowance, and any retention allowance to the EPF.
The company contributes 12 per cent, which is divided between 3.67 per cent for EPF and 8.33 per cent for EPS, while the employee contributes their whole amount to EPF.
Employees earning less than Rs 15,000 are eligible for a 1.16 per cent pension contribution from the Indian government.
With inputs from agencies
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