Centre mulls separating EPF, pension accounts: Report

When formal sector workers withdraw their PF contributions, they also tap into their retirement savings since they are part of a single account. [Image: Shutterstock]

The Centre is considering separating the provident fund and pension accounts of Employees' Provident Fund Organisation (EPFO) subscribers.

Authorities are of the view that, once EPFO subscribers have a separate pension account, they will not withdraw their pension accumulations along with EPF, Mint has reported. The move will be implemented as a pension reform under the labour code on social security.

Moneycontrol could not independently verify the story.

Also read: EPFO net new enrolments rose 13.73% to 12.76 lakh in April

When formal sector workers withdraw their PF contributions, they also tap into their retirement savings since they are part of a single account.

"Under EPFO, the PF and pension schemes must have two separate accounts. While there should be no problem in withdrawing the PF corpus when required as per law, the pension account should be ideally kept untouched. This will increase pension earnings and offer better social security coverage," an official told the publication.

Also read - COVID-19 EPF advance 2.0: Should you withdraw your PF?

7.63 million employees have dipped into their PF accounts amid the COVID-19 pandemic, under the Centre's facility for advance withdrawal, the report said.

Around 39 million claims, including COVID-19 advances, have been settled by the EPFO from April 1, 2020 till June 19, 2021.