PF subscribers may get to pledge future contributions against home loans

Provident fund subscribers would get to pledge their PF investments for housing loan purpose under a tripartite deal among the Employees Provident Fund Organisation (EPFO), member banks and housing companies once the pension fund agency clears a proposal to this effect.

The Central Board of Trustees (CBT), the apex decision making body of Employees' Provident Fund Organisation (EPFO), will consider the report of an expert committee on allowing PF subscribers to pledge their future PF contribution to buy low cost houses.

PF subscribers may get to pledge future investments against housing loans

A committee appointed by the FPFO had unanimously recommended a scheme to facilitate subscribers to buy houses where they will get an advance from their PF accumulation and pledge their future contributions towards payment of future installments of the loan.

Under the proposed scheme, there will be tripartite agreement with member, bank/housing agency and EPFO for pledging future PF contributions as EMI payment.

The panel suggested that under the scheme, the subscribers will purchase a dwelling unit with loans from bank or housing finance companies by hypothecation of property in favour of the latter.

The panel has suggested extension of the scheme to low-income workers who are EPFO subscribers and could not afford to buy a house during their entire service period.

The benefits under the schemes may be extended to beneficiaries of housing scheme of the ministry of housing and urban poverty alleviation, the panel said.

Besides, the CBT headed by the labour minister will also take up a proposal to increase the maximum sum assured under its insurance scheme EDLI to Rs5.5 lakh from the existing Rs3.6 lakh.

A sub-committee will vet the proposal for making final recommendations to the CBT.

Besides, the trustees will consider a proposal to provide incentives to EPFO pensioners for digitally filing their live certificates. Under the proposed Jeevan Pramaan Patra scheme, the pensioners' live certificate will be collected through e-mode.

At present, these certificates are manually filed by pensioners at the banks. EPFO pays service charges to banks for collecting these live certificates of pensioners.

It is proposed to provide one time incentive of Rs100 to pensioners registering under the scheme and Rs30 for subsequent years. EPFO has about 5.1 million subscribers.

To encourage subscribers seed their accounts with customer (KYC) details such as bank account number, PAN and Aadhaar, FPFO also proposes to provide incentives to employers.

Employers will be refunded a part of administrative charges under this proposed scheme.

EPFO will also place performance review of its fund managers for 2014-15 before CBT, which placed SBI at the top with a score of 99.64 out of 100, followed by Reliance Capital (99.49), ICICI Securities PD Ltd (99.42) and HSBC AML (99).