Govt mulls tightening norms for withdrawals from EPS

NEW DELHI: Government is mulling tightening norms for withdrawals from Employees' Pension Scheme (EPS), introduced for all subscribers, who joined Employees Provident Fund from November 11, 1995, in order to bridge huge deficits faced by the scheme.

Although no such formal proposal has been mooted so far, the matter did came up for discussion on a few occasions during past meetings of Central Board of Trustees (CBT).

"Government is planning to do away with the provision of withdrawals of lump sum money from EPS 1995 before or at retirement. The matter has come up on a few occasions during recent CBT meetings, but no formal proposal has been mooted so far," a CBT member said.

He added that, "The changes in EPS rules regarding withdrawal would help government to curtail deficits being faced by the scheme which are around Rs 40,000 crore at present. These changes would not affect any post-retirement pension benefits to the subscribers."

Commutation of pension is a tool in the hands of subscribers of the schemes, which helps them meet certain immediate lump sum requirement at the time of retirement like for marriage or education of a child.

The subscribers can also withdraw money from the scheme before retirement. This also increases the deficits and affects the benefits to retirees.

An Employees' Provident Fund Organisation official said, "Since all subscribers of the scheme get enough Provident Fund money to meet immediate requirement, there is no need to allow withdrawal from pension scheme. The commutation of pension helps in developed western countries where there is no Provident Fund."