Update in EPF

The Finance Ministry has asked the Employees’ Provident Fund Organisation (EPFO) to stop all premature withdrawals and adhere to the “one instrument-one policy objective” principle. Though the EPF is meant for old-age income security, subscribers are currently allowed liberal advances and withdrawals for a variety of needs such as illness, education, house-building, marriage and education.


“The distortion created by not adhering to the stated principle is that most of the employees, say 75 per cent, of the EPF retire with as little as less than Rs 35,000 in their accounts,” wrote R Gopalan, Secretary, Department of Financial Services, Ministry of Finance, to his Labour Ministry counterpart, Prabhat Chaturvedi on December 10.


In fact, Gopalan has suggested that subscribers must take medical insurance to take care of their medical needs, home loans for house-building and educational loans for meeting educational expenses.