What was until now just a worrying trend at a regional level has now been confirmed as a countrywide phenomenon. More people prefer to withdraw their savings from the Employees Provident Fund Organisation than apply for a transfer every time they switch jobs. This was the result of a study conducted in 14 field offices including Delhi,Jabalpur,Ahmedabad,Chennai and Jamshedpur of the countrys largest retirement fund manager to assess the number of people who prefer to withdraw their money than apply for a transfer. And the results are startling: Defeating the very purpose of the EPFO to provide old age social security,nearly 59 per cent of subscribers have less than Rs 15,000 as savings at the time of withdrawal while just 1.01 per cent of members have savings of over Rs 5 lakh in their accounts at the time of withdrawal. Similarly,just 3 per cent of subscribers are over the age of 55 years at the time of withdrawal,while the majority of 57 per cent is less than 30 years old at the time of withdrawal. A mere 1.86 per cent of members withdraw savings after a period of 20 years,the majority of subscribers at nearly 56 per cent withdraw their savings from the EPFO within two years of opening their accounts. The study was undertaken after a pilot survey in the EPFO Karnal office revealed that a mere 0.8 per cent members had applied for transfer of PF balances as against 88.89 per cent members who preferred to take out their accumulations. The EPFO will present these facts to the Central Board of Trustees when they meet next Tuesday. It appears that a member is more prone to withdraw his money from the EPF office for getting his funds transferred,a reflection of the inefficiency of transfer process in EPFO, it said in a note to the CBT. Concerned by this trend and battling an annual workload of 60 lakh claims,the EPFO initially mulled a proposal to lock a subscribers contributions for a period of three years. The Finance Ministry too had directed the EPFO to stop premature and partial withdrawals. But with resistance to the idea,it is has decided to shift its focus to popularise the new electronic account transfer facility. This is the workers money,how can we stop them from accessing it. They do need money in times of sickness or for a childs marriage. We will have to look at other solutions, a member of the CBT said.
