The government has relaxed the "inoperative" accounts wherein it paves the way for retirement fund body EPFO to pay interest for such accounts.
Zee Media Bureau
New Delhi: The government has relaxed the "inoperative" accounts wherein it paves the way for retirement fund body EPFO to pay interest for such accounts, as per media reports.
A report in the Times of India said that the labour ministry has decided to start paying interest to those accounts to make them operative.
In case of EPF, if there is no contribution paid during the last 36 months, then that account is classified as "inoperative". However, with the new decision, an EPF account will be treated as operative even after termination of employment given that the employee takes up another job within two months with another employer who is covered by the EPF scheme, TOI said.
The employee can get his/her EPF account can transferred under the new employment, it further added.
About 9.70 crore workers or employees will benefit from this.
Late last month, Union Labour Minister Bandaru Dattatreya had said "The inoperative (Employee Provident Fund) accounts are not being paid interest since 2011. As per the instructions given the Prime Minister Narendra Modi and Finance Minister Arun Jaitley, we decided to start paying interest to those accounts to make them operative".
The minister further said that officials have identified that about Rs 42,000 crore is now lying in "inoperative accounts" across the country.
"People can park their funds in EPF as long they want. Since the inoperative accounts are getting interest, people may not like to withdraw. It is a safe investment also. If not today, tomorrow we will have to pay to the claimant. So there is nothing called unclaimed," a senior official of the ministry had earlier said.
"We are in the process of identifying multiple accounts held by individuals. Once that is completed we will start distributing the interest to those accounts," Dattatreya said.
With PTI Inputs