Newz Desk, Durgapur: The Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) has decided that individuals can withdraw money from their Provident Fund (PF) accounts only after remaining unemployed for one year. Previously, employees were allowed to withdraw their PF deposits after two months of unemployment.
At the same time, the time limit for withdrawing the entire amount from the employee’s pension fund has been extended to 36 months (three years) from the earlier period of two months. This means that a person leaving their job or losing employment can now access their pension fund money only after being unemployed for three years.
It is important to note that a person becomes eligible for a pension only if they have contributed continuously to the pension fund for at least ten years. Upon retirement or reaching the retirement age, such individuals are entitled to a monthly pension. Those who have not completed ten years of continuous contributions are not eligible for a pension; instead, they can withdraw the full amount accumulated in their pension fund.
Explaining the rationale behind the move, an EPFO official in Kolkata said, “Keeping in mind the social security of employees, the rules regarding provident fund and pension fund withdrawals have been revised. If employees withdraw their PF money only after a year, at least the interest for that year will get credited to their PF account.”
He explained that if an EPFO member finds a new job within two months of unemployment, they must be registered again under the new employer. Although the Universal Account Number (UAN) system simplifies this, the process still involves creating a new ID. By extending the withdrawal period to one year, the likelihood of employees finding new jobs within that time increases, reducing the need for repeated re-registration.
Regarding the pension fund, the three-year waiting period gives individuals additional time to qualify for pension eligibility.
Another senior EPFO official noted that since the Covid-19 pandemic, the tendency to withdraw money from PF accounts has increased significantly. “Most young employees today focus more on the cash in hand rather than saving for the future,” he said. “They often ignore the importance of maintaining PF or pension fund deposits, which goes against the government’s social security vision.”
The official further said that the new rule is intended to encourage employees to remain within the EPFO framework and develop long-term saving habits.
Frequent withdrawals have also created cash flow challenges for the EPFO. As the organisation seeks to provide higher interest rates on deposits, it invests in various financial instruments through fund schemes. However, frequent withdrawals disrupt liquidity and affect investment implementation.
With the new rule, the EPFO aims to retain deposits for longer durations, improve cash flow stability, and sustain attractive interest rates for its members.
EPFO extends waiting period for PF and pension withdrawals
