EPF Members Retirement Age increased to 58 Years
Central government in their new notification dated 10th February 2016, have decided to increase retirement age of EPF members to 58 years from 55 years.
Once EPF member attains the age of 57 years EPF member can withdraw 90% of EPF balance
Earlier EPF member was allowed to withdraw 90% of his/her EPF balance at the age of 54 years, one year prior to the retirement age of 55. After raising retirement age EPF member to 58 years, member can only able to withdraw EPF only at the age of 57. But the change is that now under this facility, the EPF member would be able to withdraw 100% of his contribution and interest earned on it unlike 90% of the total accumulations in the past.
New Rule: EPF/ EPS Employer contribution cannot be withdrawn before the new retirement Age of 58/57 from February 2016.
According to the new rule EPF members cannot withdraw their EPF Employer contribution part before new retirement age of 58 years. Employee contribution withdrawal before 5 years service is still taxable as earlier. There is no further information whether EPFO will pay tax on non withdrawal employer contribution till the retirement age. The inoperative account rule of EPF says that an EPF account would not earn interest if there is no contribution for 3 years. As per the EPF rule inoperative account which is older than 3 year does not earn any interest.
According to the new rule: “A member who ceases to be in employment and continues to not be employed with a covered establishment for at least two months, may be permitted to withdraw only his own share of contribution, including interest earned thereon. The requirement of ‘two months’ period referred above shall not apply in case of female members resigning from the service for the purpose of getting married or on account of pregnancy/ childbirth.”