Employees arrive at the Vadinar Refinery complex operated by Nayare Energy Ltd., formerly known as Essar Oil Ltd., near Vadinar, Gujarat, India. (Photographer: Dhiraj Singh/Bloomberg)

EPFO Subscribers Can Withdraw 75% Of Funds After 30 Days Of Unemployment

The Employees’ Provident Fund Organisation today decided to give its members an option to withdraw 75 percent of their funds after one month of unemployment and keep their provident fund account with the retirement fund body.

Members would also have the option to withdraw the remaining 25 percent of their funds and go for final settlement of account after completion of two months of unemployment under the new provision in the Employee Provident Fund Scheme, 1952.

Also read: EPFO Cuts FY18 Interest Rate To Five-Year Low 

"We have decided to amend the scheme to allow members to take advance from their account on one month of unemployment," Labour Minister Santosh Kumar Gangwar, who is also the Chairman of EPFO's Central Board of Trustees, told reporters after the trustees’ meet in New Delhi.

At present, in case of unemployment, a subscriber can withdraw his or her funds after two months of unemployment and settle the account in one go. However, it was proposed that the members would be allowed to take 60 percent of funds as advance on unemployment for not less than 30 days. But, the Central Board of Trustees raised the limit to 75 percent in the meeting held today.

The minister further said, "We approved almost the entire agenda listed for the meeting of the Central Board of Trustees today. We have also given an extension of one year to exchange traded funds manufacturers State Bank of India and UTI Mutual funds till July 1, 2019. We have extended the term of fund managers till December 31, 2018." There was a proposal to give an extension of six more months to its five fund managers SBI, ICICI Securities Primary Dealership, Reliance Capital, HSBC AMC and UTI AMC for managing its corpus.

Also read: EPFO To Consider Crediting ETF Units To Provident Fund Accounts

The five fund managers were appointed for three years from April 1, 2015. They were given extension till June 30, 2018. The Central Board of Trustees has also approved the proposal to appoint a consultant for selection of portfolio managers.

The minister also said that the EPFO's exchange traded funds investment would soon cross Rs 1 lakh crore mark as its has already invested Rs 47,431.24 crore till May-end this year, earning a return of 16.07 percent.

The EPFO has also extended the tenure of its consultant CRISIL for evaluation of performance of fund manager till December 31, 2018.

On the widening of range of the exchange traded funds investments by the EPFO, a Central Board of Trustees member said that the agenda was deferred and the board was unanimous that a call will be taken on the advise of new fund managers and consultants to be appointed shortly.

It was proposed to amend the investment pattern of the EPFO to enable the body to invest in equity index exchange traded funds beyond NIFTY 50 and Sensex.