Good news! Govt cancels new PF withdrawal norms, old system to continue

In a major relief to the salaried class, the government on Tuesday cancelled the new Provident Fund withdrawal norms which restricted workers from withdrawing the entire amount from the PF till they attend the age of 58 years.

Last Updated: Apr 19, 2016, 21:40 PM IST
Good news! Govt cancels new PF withdrawal norms, old system to continue

Zee Media Bureau

New Delhi: In a major relief to the salaried class, the government on Tuesday cancelled the new Provident Fund withdrawal norms which restricted workers from withdrawing the entire amount from the PF till they attend the age of 58 years.

This cancellation of the new norms means that an employee can now withdraw the entire corpus accumulated under the EPF tax free including the employers' share of 3.67 percent.

"The notification issued on February, 10, 2016 is cancelled. Now the old system will continue," Union Labour Minister Bandaru Dattatreya said at a press conference.

 

"I will take ratification from CBT (Central Board of Trustees of EPFO)," he said after violence rocked Bengaluru for the second day when garment industry workers torched several buses and attacked a police station protesting against the tightening of rules.

 

The government had come under fire from various angles, especially from the salaried class, following the announcement that employees would not be allowed to withdraw their full PF contribution amount till they attend the age of 58 years.

 

Giving reasons for the rollback, Dattatreya said, "The reason is the request of trade unions. The earlier decision (to tighten the PF withdrawal norms) was also taken by the opinion of the trade unions. Now, when the trade unions are requesting, then we have rolled back the decision."

Earlier during the day, facing continuing protest, the government had put on hold till July-end the tighter rules for withdrawal of PF money as garment workers in Bengaluru set ablaze buses and attacked a police station on the second day of their agitation.

People have also launched online campaign against the decision, which was to be implemented from February 10 but was later put on hold till April 30.

Protesters pelted stones at Hebbagodi Police Station in Bengaluru and torched seized vehicles parked there, as the spontaneous agitation with no trade union leading it spun out of control.

 

Police said they had to resort to lathicharge and fire teargas shells to disperse violent protesters.

Workers opposing amendment to EPF Act have expressed fear that the new rule would take away their right over employer's contribution portion of provident fund till they attain 58 years.

Earlier in February, the EPFO had amended the EPF Scheme 1952 to tighten the various norms for withdrawal of provident fund including increasing age limit for filing such claims by retiring employees to 58 years from 54 years.

 

Besides, the EPFO had also restricted withdrawal of PF to own contribution of subscribers and interest earned on that, if the claimant has remained unemployed for more than two months. The member would be able to withdraw employer's contribution on maturity.

Earlier norms used to allow subscribers to claim 90 percent of their accumulations for investing in the scheme after attaining the age of 55 years.

In its statement, the Union Labour Ministry said the amendment was carried out "with the consent of trade unions and with the intention of promoting a decent accumulation of provident fund for the members at the end of their working lifetimes".

However, considering the representations received from various quarters and after consultations with the various stakeholders... The government has decided to withdraw the said February 10, 2016 notification with immediate effect," it said.