EPF norms
Q. Which of the following is/are true?
1) At present, EPF accounts are mandatory for firms hiring 20 employees or more.
2) According to a February 2016 notification, EPFO subscribers can withdraw both their own share of PF deposit as well as employer’s contribution.- Published on 19 Apr 16a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
ANSWER: Only 1
- At present, EPF accounts are mandatory for firms hiring 20 employees or more and are funded by employees paying 12 per cent of their salary to the EPFO with employers making a similar contribution.
- According to a February 2016 notification, EPFO subscribers can withdraw only their own share of PF deposit and the balance, comprising the employer’s contribution, only after the employee attains 58 years of age.
- The employer’s share will continue to earn interest as the EPFO had recently approved a plan to credit interest even on inoperative accounts (those with no deposits for three consecutive years).
- The decision to place restrictions on withdrawing PF money was taken after it was found many workers took out all the money from the account immediately on quitting their jobs.
- PF norms may be eased on pressure from trade unions. Subscribers could be allowed to withdraw their entire savings including the employer’s contribution in specific cases such as their own marriage, studying professional courses and illness.
