More than eight crore members of the Employees’ Provident Fund, can now opt to move their retirement savings to the National Pension System overseen by the Pension Fund Regulatory and Development Authority (PFRDA) – over two years after Finance Minister Arun Jaitley had promised such an alternative for employees in the Budget for 2015-16.
The PFRDA notified the procedure for EPF members to transfer their investments to the National Pension System or NPS on Tuesday.
Terming members of EPF and Employees’ State Insurance Corporation (which provides medical care to organised sector workers) as “hostages, rather than clients”, the finance minister had said such workers’ incomes suffer due to high statutory deductions towards EPF and ESIC.
He had promised to provide employees the option to leave the EPF and opt for the NPS and had also said that employees below a certain level of monthly income could decide if they wanted to stop their own contributions to the EPF. In all, 24% of an employee’s salary is diverted to the EPF as a mandatory retirement saving scheme.
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