EPFO advises members to refrain from withdrawing funds fully for trivial reasons
Employee Provident Fund Organisation (EPFO) has advised subscribers not to withdraw funds completely for petty reasons, as it can lead to losing the social security benefits which come with continuity.
Those who continue to hold the fund till they retire are entitled to social security benefits, which they otherwise tend to lose. Early withdrawal will lead to the loss of old-age security and pension benefits along with the PF money.
This announcement came because many of the subscribers started withdrawing the funds fully to use it for petty reasons.
The retirement fund body said that PF money is meant to provide social security benefit and subscribers should not treat it like a bank account.
V Ranganath, additional commissioner, central PF commissioner, Punjab and Himachal Pradesh, said “We want to convey to all our members not to be tempted to make final withdrawals from their provident fund balances unless and until it is really necessary. They should continue to live with the fund until they retire from service—that is our primary objective.”
He further added “…we are discouraging people from withdrawing in full for petty reasons, because they are not only losing on their PF money, but also losing out big time on old-age security and pension”.
EPFO has clarified that membership of the subscribers indulging in part withdrawal from their PF account is not going to be affected, but those opting for full withdrawal will lose the membership and all the associated benefits.
Full withdrawal is when an individual has quit his job at a company and does not intend to be employed further, and wishes for all the PF money to be given to him.
In part withdrawal, which is also called advance, a subscriber withdraws only a part of the total PF money to fulfill certain needs.
EPFO has also introduced a whole lot of facilities for the subscribers, which they are unaware off. There is a scheme called Pradhan Mantri Rozgar Yojana for the employers and housing schemes for the employees.
Therefore, employees wishing to enjoy retirement benefits, such as pension and other social security benefits, need to preserve their money in the PF account.