Soon, you'll be able to withdraw your PF via ATMs
What's the story
The Indian government is gearing up to launch the EPFO 3.0 plan, a major upgrade to the current provident fund system.
According to CNBC Awaaz, the new initiative will bring several improvements for subscribers of the Employees' Provident Fund Organisation (EPFO).
Among the proposed changes, the Labour Ministry is working on a system to enable PF withdrawals through ATMs by issuing cards. The service is likely to be launched by mid-2025.
Flexible contributions
EPFO 3.0 to offer flexible contributions
The EPFO 3.0 plan may also lift the current 12% cap on employee contributions to their Provident Fund (PF) accounts, providing them more flexibility in deciding how much they want to contribute to their PF accounts according to their own savings preferences.
The government's main aim with this change is to give subscribers more freedom to save.
Despite the proposed changes, employer contributions will still be based on salaries, ensuring stability in the system.
EPS-95 revamp
Labour Ministry to revamp pension scheme
The Labour Ministry is also mulling a revamp of the Employees's Pension Scheme 1995 (EPS-95), according to PTI.
Currently, employees' full 12% contribution is directed to the EPF account, while 8.33% of the employer's share goes to EPS-95, and the remaining 3.67% to EPF.
The report indicates that the ministry is exploring options to let employees contribute directly to EPS-95.
This initiative could allow subscribers to increase their pension benefits under the revised framework, leading to improved retirement security.