To maintain the same income after retirement, employees have the option to invest in EPFO while working. A portion of the investment in EPFO is received as a pension after retirement. Now, the rules of EPFO are likely to change. Once these changes are implemented, investors are expected to benefit significantly.
Yes, the government is planning to introduce EPFO 3.0. After its implementation, several rules of EPFO will be revised. These changes will provide investors with greater convenience in withdrawing and investing in the Provident Fund.
What is EPFO 3.0?
The government recently announced the PAN 2.0 Project, and now it is believed that the government will soon announce the EPFO 3.0 project. This project aims to introduce several changes to make EPFO more convenient. Once these changes are implemented, many of the issues faced by investors will be resolved. In this article, we’ll explain how employees will benefit from the EPFO 3.0 project.
Contribution Amount Will Increase
Currently, employees can invest only 12 per cent of their salary in EPF. According to media reports, once the EPFO 3.0 project is implemented, employees will have the option to increase their contribution share. This means they can invest more than 12 per cent, offering greater flexibility for those who wish to invest more.
Many employees wanted to invest more than 12 per cent in EPFO but were unable to due to the existing limit. With EPFO 3.0, they will be able to invest as per their preference.
You Will Be Able to Withdraw Money from ATM
Many employees face difficulties when making partial withdrawals from their Provident Fund accounts. To address this issue, EPFO 3.0 is set to allow employees to withdraw money directly from their PF accounts via ATMs.
This change is expected to make it much easier to access funds from the PF account. Reports suggest that this rule could be implemented by May-June 2025.
What Is the Aim of the Labour Ministry with EPFO 3.0?
The Labour Ministry aims to ensure that employees have the convenience of saving as per their preferences and requirements.
EPFO 3.0: Will Employers’ Contribution to EPF Increase?
Currently, there is no discussion about increasing the employers’ contribution to the EPF.
How Will ATM Withdrawals Work?
Under EPFO 3.0, an EPFO card will function like an ATM card. Employees will be able to withdraw over 50 per cent of their Provident Fund amount directly, similar to how a bank account operates.
Reforms in EPS-95
The government is also focusing on reforms to the Employees’ Pension Scheme 1995 (EPS-95). At present, 8.33 per cent of the employer’s contribution is allocated to EPS-95. The proposed changes may allow employees to contribute directly to the scheme, potentially increasing their pension payouts.