EPFO’s new plan to bring back old members, entry will be available only with a contribution of Rs 500 per month

In the Kovid-19 year of 2020, this number could be much higher. If the resolution is passed, it can be a big relief for lakhs of workers.

There is a provision to add new schemes under EPFO ​​in Social Security Code 2020. Hence, it can be started with the implementation of the code by the next financial year.

The Employees’ Provident Fund Organization (EPFO) is working on a new model. This model is an attempt to bring back those people who had to leave EPFO ​​due to job loss or moving from formal to informal sector. Under this new model, a contribution of ₹ 500 per month or with a monthly income of 12% can be linked to EPFO.

The plan will be finalized after the analysis

The Economic Times wrote in a report quoting a top government official, ‘We are trying to assess its impact on Pension (EPS), Provident Fund (EPF) and EPFO’s employee deposit-linked insurance scheme. Actual analysis of the scheme is being done after which the plan will be finalised. EPFO estimates that around 4.8 million people dropped out of the organization during 2018-20, the database of which is easily available with EPFO. In the Kovid-19 year of 2020, this number could be much higher. If the resolution is passed, it can be a big relief for lakhs of workers.

These provisions in the Social Security Code 2020

There is a provision to add new schemes under EPFO ​​in Social Security Code 2020. Hence, it can be started with the implementation of the code by the next financial year. The retirement fund body has a database of all exiting members with Universal Account Number which is linked with Aadhaar. The retirement fund body wants to use this to bring back the members.

Will help in building retirement corpus

This move by the retirement fund body will help people build a retirement corpus, which gives assured returns at a relatively higher rate than any other deposit schemes. This will also increase the EPFO ​​corpus and subscriber base. Individuals who are enrolled in the EPF scheme will be able to take advantage of pension, PF and insurance. In addition, they will be eligible for a fixed rate of return based on the return on investment of the EPFO ​​during the year. EPFO has given 8.5% interest in FY 2021.

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