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.
- 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.