The government is planning to introduce EPFO 3.0, which means it will bring major changes to your life if you are an EPFO member or even if you are starting your career soon.
What is EPFO?
EPFO, or the Employees’ Provident Fund Organization, is a Social Security Agency in India that manages retirement plans for employees. It manages Provident Fund (PF), Pension Schemes, and more. EPF and EPS are two of the most popular instruments that it offers. If you see your salary slip or your offer letter, you will find EPF in your salary breakdown. Here, both the employee and employer contribute to this account with a portion of your salary, and it can be withdrawn later after retirement or in certain situations.
What is EPFO 3.0?
Now, the government is planning to change some rules to make things easier for employees. According to sources, the plan is to remove the 12% contribution cap and allow employees to contribute as much as they want to the EPF account. This means that you can add more to the EPF account voluntarily if you want. However, the 12% threshold remains for the employer’s contribution. This will be converted into a higher pension for subscribers who contribute more later on.
Second,the Labor Ministry is planning to issue a card-like a debit card for PF withdrawals. By using this card, subscribers can withdraw their Provident Fund amount through ATMs themselves. But remember, you will still not be able to withdraw more than 50% of your total PF. This will help in the easy withdrawal of funds for employees at any given point in time.
Third,as per reports, the Labor Ministry is also considering the revision of the EPS 95 by allowing employees to contribute directly to the scheme. As of now, the entire 12% employee contribution goes to EPF, and the employer’s contribution is split between EPS 95 and EPF. Under the proposed changes, employees could increase their pension benefits by directly contributing to the EPS 95, meaning they can convert their Provident Fund to a pension scheme at any given point in time.
As for reports, earlier, the government was also planning to increase the wage ceiling from ₹15,000 to ₹21,000. This will add more people to the EPS pool.
As per reports, the new EPFO 3.0 framework is expected to be announced between May and June 2025.
To involove our fechure goals
Ya
It is very good step of present government for the employee’s future.