The Modi government is actively working to benefit employees across the country.
After announcements of Diwali bonuses, a hike in Dearness Allowance (DA), and increased pensions, another major step has been taken.
This time, it concerns the Employees Provident Fund Organization (EPFO). The government is planning a significant change that will allow EPFO users to withdraw their funds directly from ATMs.
Easier Withdrawals for Private Sector Employees
Employees in the private sector often face difficulties in withdrawing their EPFO funds. Although online methods have made this process simpler, many still struggle with accessing their money.
Currently, EPFO funds can be withdrawn online and transferred to a bank account without visiting a physical office.
Under the current system, employees can withdraw the full amount in two categories.
However, with the upcoming change, EPFO accounts will function more like regular bank accounts, giving users the flexibility to withdraw money as needed through ATMs.
New System Under Development
The government is developing a new system to make EPFO withdrawals hassle-free. Once implemented, employees will be able to use their bank’s ATM card to access their EPFO funds.
This system will link EPFO accounts directly to users’ bank accounts, ensuring seamless withdrawals.
Often, employees accumulate large amounts in their EPFO accounts but are unable to use it efficiently. The new rules aim to eliminate this inconvenience by providing quick access to funds.
Benefits for Retirees
This change will also help retired employees who don’t want to withdraw their entire Provident Fund (PF) at once.
With the new ATM-linked system, retirees can withdraw smaller amounts as needed, making it easier to manage their savings and enjoy a more comfortable retirement.
Possible Removal of the 12% Contribution Limit
In another big move, the Ministry of Labor is considering removing the 12% mandatory contribution limit for employees under the EPFO.
If implemented, this change will allow employees to save according to their financial goals, offering greater flexibility in building their savings.
