Eroding Retirement Corpus
Labour Ministry data shows that frequent early withdrawals have weakened the retirement safety net.
The government is preparing to notify new EPFO rules, extending withdrawal timelines and creating a uniform 12-month lock-in for all partial withdrawals.
- About 50% of EPF members have less than Rs 20,000 at the time of final settlement.
- About 75% of EPF members have less than Rs 50,000 at the time of final settlement.
- About 87% of EPF members have less than Rs 1,00,000 at the time of final settlement.
Officials hinted that this trend leaves employees with "insufficient PF balance or lack of pensionable service at the time of retirement," undermining the very purpose of the provident fund system.
Roughly 75% of pension withdrawals happen within four years.
Author summary: EPFO raises full withdrawal wait time to 12 months.