The central government is planning to separate PF and pension accounts. At present, while withdrawing money from PF, employees also withdraw money from pension fund, which affects their pension. Due to separation of accounts, money will not be withdrawn from the pension fund.
The central government is planning to separate the provident PF and pension accounts of the employees of the formal sector covered by the Employees’ Provident Fund Organization (EPFO). This will affect about six crore subscribers of EPFO.
Actually, the government wants both the accounts separately because the employees also withdraw money from the pension fund while withdrawing money from PF. At present, PF PF and Pension Fund are part of the same account. A large number of people lost their jobs in the Kovid epidemic. Since the start of the pandemic last year, 70.63 lakh people have withdrawn money till May 31 this year.
8.33 percent goes to pension fund, out
Of 24% contribution of company and employees in EPFO, 8.33% is deposited every month in Employees Pension Scheme (EPS) and rest in PF. It has been seen that often employees withdraw pension amount while withdrawing money from EPFO. If the account of both is separated, then the pension fund money will not be able to withdraw.
Separation of account will
lead to more pension PF after retirement and separation of pension account will increase the pension income of the employee after retirement. According to Brijesh Upadhyay, a member of the Central Board of EPFO, there is a desire for more pension among the people. For this, a better solution can be to separate PF and pension account. After the separation of the account, the employees can get more pension after retirement by contributing more to the pension.
Possibility of bringing two types of schemes
Two schemes can be brought for this. One scheme can be for those earning less than Rs 15,000 per month and the other for those earning more than this. For every member earning less than Rs 15,000, the government currently contributes 1.16% to the Employees’ Pension Scheme of EPFO and this may continue.
