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Covid Call: Over a third of EPFO Members Opted for Non-Refundable Withdrawals

In response to the challenges posed by the Covid-19 pandemic, the Employees’ Provident Fund Organisation (EPFO) introduced a special window allowing non-refundable withdrawals for its subscribers. This measure aimed to alleviate financial strains during the unprecedented times.

Magnitude of Withdrawals

  • Over 22 million EPFO subscribers, constituting more than a third of the total, availed themselves of the non-refundable withdrawal option during the pandemic.

Financial Impact – 2020-21:

  • In the financial year 2020-21, withdrawals from the retiral savings amounted to ₹48,075.75 crore.
  • EPFO disbursed ₹17,106.17 crore benefiting 6.92 million subscribers.

Financial Impact – 2021-22:

  • In the subsequent year, 2021-22, withdrawals increased to ₹19,126.29 crore, benefiting 9.16 million subscribers.

Financial Impact – 2022-23:

  • In the ongoing financial year, 2022-23, EPFO disbursed ₹11,843.23 crore, benefitting 6.20 million subscribers.

EPFO’s Subscriber Base and Corpus

  • EPFO manages the retirement savings of approximately 60 million subscribers.
  • The organization oversees a corpus of around ₹18 lakh crore.

Government Intervention

  • The government amended the EPF Scheme, 1952, allowing members non-refundable withdrawals.
  • Members could withdraw funds equivalent to basic wages and dearness allowance for three months or up to 75% of the amount in their EPF account, whichever was less.

Implementation and Response

  • The facility came into effect from March 28, 2020, with 33 beneficiaries withdrawing ₹6 lakh in the initial four days.
  • Claims were expedited, with the majority settled within three days, minimizing the financial shock on households during the pandemic.

Extension of Facility

  • The EPFO extended the withdrawal facility in March 2021, allowing a second round of withdrawals from the PF corpus.

Tripartite Decision-Making Body

  • The central board of trustees of the EPFO, a tripartite body chaired by the labor minister, serves as the apex decision-making body.
  • Approval from the central board of trustees is mandatory for all EPFO reports before formal acceptance by the government.

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