New Delhi, March 28, 2017
New norms applicable only with nations that have social security pact with India
Providing significant relief to international employees of multinational firms working in India, the Employees’ Provident Fund Organisation (EPFO) has issued guidelines that would allow lumpsum withdrawal of retirement savings once their employment in the country comes to an end.
“This will facilitate payment of provident fund and withdrawal benefit under Employees’ Pension Scheme, 1995 to international workers on the date of leaving service in India,” said the EPFO in a recent circular, adding that it has also made suitable changes in its software to ensure that the claims are processed before before exit from service.
In such cases, it has advised employers to pay the contribution of the retiring (leaving) worker with in the first three days of the particular month. The employer should also submit the completed claim forms for such workers complete the concerned provident fund office by the 5th of the month in which the member is leaving service.
“The provident fund officer shall ensure settlement of such retirement claims and credit the settlement amount to the member’s account on the date of leaving service in India to the bank account maintained in India,” it said, stressing that the directive should be implemented by all field offices.
The facility will be available only to workers from establishments in countries that have a social security agreement (SSA) with India. At present, India has operational SSAs with 17 countries, including Austria, Canada, France and Japan.
The move will allow international workers to take back their retirement savings accrued in India to their country of origin or employment when they finish their service in India.
Till now, there was no special provision for international workers under the EPF who had to wait until they retired at the age of 58 years to withdraw their money. Alternatively, withdrawal was allowed if they retired due to a disability or if they stopped being an employee of a covered under an operational SSA.
Under the EPF, international workers could only make lumpsum withdrawals if they were covered under an SSA and have worked for less than 10 years in India.
Welcoming the move, experts said it is also expected to extend to international workers who have left India on completion of service.
“The intention behind this circular seems to be that international workers should claim PF withdrawal while they are still in India and have an Indian bank account to obviate the need for overseas remittance,” said EY in a recent note, adding that workers who have left the country can claim a PF refund in their Indian or overseas bank account or in the account of their employers.
[The Hindu Business Line]