EPFO 3.0 scheme: Under this scheme, you can withdraw PF money from ATM

EPFO 3.0 scheme: A significant adjustment to the Employees’ Provident Fund Organization (EPFO) is being planned. This system, which gives private sector workers financial security until retirement, could shortly undergo significant modification. This reform may put an end to the workers’ serious problems. In fact, it has been reported that the government is developing a system under EPFO that would allow Employees’ Provident Fund Organization (EPFO) members to access their PF funds via an ATM with a debit card whenever they need cash.

In order to preserve financial stability even after retirement and to provide liquidity in case of emergencies, the ATM withdrawal limit will also be set. The government’s ambitious EPFO 3.0 strategy, which promises to modernize services and offer clients greater control over their savings, is claimed to include this effort.

Higher contributions are also being discussed.

The Ministry of Labor is thinking about lifting the 12% maximum on employee contributions in addition to ATM withdrawals, which would enable workers to save more in accordance with their financial objectives. The ability to deposit more than the present limit at any moment may soon be available to members, according to reports. Employees may have the option to deposit funds into their accounts, which may allow them to grow their savings without any limitations, even while employer contributions will continue to be salary-based for stability.

Additionally, EPS reforms are being implemented.

Additionally, the Employees’ Pension Scheme 1995 (EPS-95) is undergoing modification by the government. EPS-95 now receives 8.33% of the employer’s contribution. Employees may be able to improve their pension benefits by making direct contributions to the plan under the proposed modifications.

When will the significant change occur?

These steps seek to strike a compromise between short-term liquidity requirements and long-term financial stability in order to allay long-standing worries about the EPFO system’s restricted access and flexibility. The EPFO 3.0 changes, which are anticipated to be formally announced in early 2025, have the potential to fundamentally alter how India’s workforce handles and spends its savings.

It is important to note that EPFO presently collects retirement money for workers in the private sector. Both the employer and the employee pay 12% of the salary to the PF account. The government then pays interest on it every year.