Changes in Withdrawal Conditions for EPFO Members

The Employees’ Provident Fund Organisation (EPFO) has streamlined its withdrawal conditions for over 30 crore members, categorizing them into three main areas:

• Essential needs: illness, education, marriage.
• Housing needs.
• Special circumstances.

Withdrawal Limits Eased

• Education withdrawals are now allowed up to 10 times the existing limit.
• Marriage withdrawals are permitted up to 5 times, compared to the previous 3 partial withdrawals for marriage and education combined.
• Withdrawals under "special circumstances" no longer need a specified reason, unlike earlier requirements.

Minimum Service Period Adjustments

• Minimum service period for withdrawals is reduced to 12 months for housing.
• Education and marriage withdrawals require a minimum service of 7 years.
• Withdrawals for other reasons can occur any time during service.

Account Balance and Interest

• Members must maintain a minimum balance of 25% of contributions in their accounts.
• This ensures a high rate of interest from EPFO, currently at 8.25%, with compounding benefits.

Digital Transformation: EPFO 3.0

The EPFO introduced a digital framework aimed at:

• Integrating cloud-native, API-first, microservices-based modules for better account management.
• Ensuring faster, automated claims and instant withdrawals.
• Providing a multilingual self-service and seamless payroll-linked contributions.

Committee Formation and Fund Management

A committee will be formed to evaluate RBI's recommendations on fund management and investment practices. This will include:

• Conducting scientific and actuarial assessments of liabilities versus assets.
• A gradual approach to diversification and increased exposure to equities.
• Phased investments with strict risk controls.

EPFO's Investment Portfolio

• Current equity allocation is at 15% of fresh accretions.
• Investments in government bonds range from 45-65% and in corporate debt from 20-45%.
• RBI recommends removing the floor for corporate bond investment due to a mismatch in debt issuance and fresh inflows.

Selection of Fund Managers

The CBT approved the selection of four fund managers for EPFO's debt portfolio management for five years:

• SBI Funds Management Ltd
• HDFC AMC Ltd
• Aditya Birla Sun Life AMC Ltd
• UTI AMC Ltd