Thirteen Withdrawal Rules Become Three: The EPF Scheme of 1952 Is Retired

Article summary

The Employees' Provident Funds Scheme, 2026 replaces the scheme of 1952, and the Employees' Pension Scheme, 2026 replaces both the 1995 pension scheme and the 1971 Family Pension Scheme — all now operating under the Code on Social Security, 2020. Contribution rates are unchanged: 12 per cent each from employee and employer, with 10 per cent continuing for certain establishments, an employer share of 8.33 per cent flowing to the pension scheme subject to the wage ceiling, and a government contribution of 1.16 per cent. What changes is the machinery. The thirteen separate withdrawal provisions of the old scheme collapse into three categories — essential needs covering illness, education and marriage; housing needs; and special circumstances — with a floor requiring that at least 25 per cent of the balance be retained. Housing withdrawals are capped at 75 per cent of the balance after twelve months of membership and five occasions; education withdrawals are permitted up to ten times and marriage withdrawals up to five. The pension formula is untouched at pensionable salary multiplied by pensionable service divided by 70, with a minimum pension of ₹1,000 a month and a ten-year minimum eligible service. A new claim-settlement discipline requires settlement within twenty days, failing which 12 per cent annual interest applies and may be recovered from the responsible official's salary.