The labour ministry on Sunday allowed millions of subscribers of the Employees’ Provident Fund Organisation (EPFO) to withdraw a portion of their retirement savings with immediate effect to deal with the Covid-19 pandemic.
Employees’ Provident Fund Organisation subscribers can withdraw up to 75% of their savings or a maximum of three months’ basic pay and dearness allowance from their provident fund account, whichever is lower, according to the gazette notification.
However, the withdrawal cannot be reversed after the situation improves.
Unlike in other cases, the retirement fund manager has promised to honour withdrawal requests within three days.
The move is likely to benefit thousands of people but has its own share of operational challenges in the current nationwide lockdown scenario.
“Please note that Covid-19 has been declared a pandemic for the entire country and, therefore, the employees working in establishments and factories across entire India, who are members of the EPF Scheme, 1952, are eligible for the benefits of non-refundable advance under the sub-para (3) of Para 68L which has come into force from today,” said the notification.
“The notification amends the EPF Scheme, 1952, by inserting Sub-Para (3) under Para 68L of the EPF Scheme, 1952, to provide for non-refundable advance to EPF members not exceeding the basic wages and dearness allowances for three months or up to 75% of the amount standing to member’s credit in the EPF account in the event of outbreak of epidemic or pandemic,” it added.
The pandemic withdrawal adds to a select list of events under which subscribers are allowed non-refundable withdrawal.