Nomination must for non-emergency EPFO withdrawals

The Employees Provident Fund Organisation (EPFO) has mandated that “non-emergency withdrawals will happen once nomination is embedded in the account”.

In other words, a nomination will be key for withdrawing PF deposits for non-medical purposes, and the EPFO is aiming to achieve 100 per cent registration of e-nominations to accounts – at least 40 per cent of which are without nominees.

A report in Money Control said, quoting from at least three government officials, that following a directive from the government, the EPFO has asked its 120-plus field offices to get on the job in a “mission mode” and asked employers to ensure e-nomination.

The EPFO currently has an active subscribers’ base of around 60 million and manages a corpus of over Rs 15 trillion directly or through exempted trusts.

“As part of the initiative, EPFO is asking employers that except for medical-related claims and COVID-19 advances, it is now a must to have nomination details before employees are allowed to withdraw the PF corpus for any other reasons,” a senior government official reportedly said.

“The aim is not to put any one in inconvenience, but improve the EPF user experience, reduce paper works, and make sure that all accounts are clean in terms of claimants when the time arises,” an EPFO official was quoted as saying.

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The target that has been given to EPFO is to achieve 100 per cent e-nomination, for which “field officers are on the job and reaching out to employers on a priority basis for the past few weeks”.

“We are not initiating any criminal proceedings. But field officers have communicated that non-emergency withdrawals will happen after the nomination is embedded in the account. We believe that employers value the virtuous intention behind it and realise that it will be helpful for their employees in getting seamless service,” a government official said, according to the Money Control report.

An EPFO subscriber pays 12 per cent of their basic wage as a monthly statutory contribution and the employer gives another 12 per cent to the EPFO. Of the employer’s contribution, 8.33 per cent goes to the employee pension scheme and the rest goes to the EPF corpus.