The central government is preparing to take a big step to strengthen the social security of the elderly after retirement. It is being considered to give the employees associated with the Employees Provident Fund Organization (EPFO) the option to convert their PF (Provident Fund) funds into pension. If this rule is implemented, employees will get more pension benefits after retirement and their financial security will be better.
There may be a big announcement in the upcoming budget
In the Union Budget 2024 to be presented on February 1, the government can announce this major step related to social security. The Ministry of Labor and Employment has already started work on these new provisions. This step will be an important effort towards strengthening social security and providing financial stability to the elderly.
Option to convert PF fund into pension
Under this initiative of the government, employees will get the option to convert their PF fund into pension fund. With this, they will be able to get more pension after retirement. This scheme is being brought with the aim of securing the economic future of the elderly and improving their social security.
Banking like facility in PFO system
The central government is considering a plan to make the existing system of EPFO on the lines of banking. From this:
- Employees will get facilities like banking.
- There will be more transparency and simplicity in pension and fund management.
- It will become easier to avail the benefits of post-retirement plans.
Potential benefits of the new rules
1. Interest benefit after retirement
If an employee does not want to start pension at the age of 58, he will continue to receive annual interest on the pension fund.
- The employee can choose the age of 60 or 65 years to start pension.
- During this period, the interest received on the deposited amount will further strengthen his financial security.
2. Facility to deposit lump sum amount
The objective of the ministry is that EPFO members can deposit a lump sum amount in their account along with regular monthly contributions.
- With this, more money will be deposited in the PF account.
- You will get the benefit of better pension after retirement.
3. Income tax exemption
The attractiveness of interest available on EPFO accounts makes it more suitable for investment.
- More than 8% interest is available on deposits in PF fund, which is better than the FD rates of banks (less than 7%).
- If the government allows lump sum deposit in PF account, it can become a better means of saving for retirement.
Importance of this government scheme
This step of the government is a major effort to financially secure the lives of the elderly and promote social security.
- Employees will get new options for higher pension.
- The elderly will be guaranteed regular income after retirement.
- The scope of social security will be wider.
