Impact on International worker of the recent amendment in PF regulations: Some basics

Description	Provisions prior to amendment	Provisions Post amendment
Contribution	Employee contribution is restricted to 12% of salary*	No change
	Employer makes a matching contribution i.e. 12% of salary.  However 8.33% of INR 6,500 goes towards pension fund and the balance goes towards provident fund i.e. [ 12% of salary – (8.33% of INR 6,500)]	The restriction of contribution towards pension fund i.e. 8.33% of INR 6,500 seems to have been removed. We are seeking clarity on this from PF authorities
Interest	Interest is paid at 9.5% on total accumulated deposits	Interest is paid at 9.5% on total accumulated deposits. However, the government is planning to stop interest payments on accounts which are dormant for three years or more
Withdrawal of Provident fund	Withdrawal was permitted on cessation /termination of employment. Application for withdrawal could be made after two months from the date of termination. Expats were able to withdraw the contributions after two from the end of Indian assignment.	Withdrawals permitted on retirement from service after attainment of 58 years subject to some exceptions.
Withdrawal of Pension fund	Permissible if the employee works for more than 10 years before cessation of employment. As the amount of contribution was limited to INR 542 per month, it was not a major cost for companies	Not permitted unless the international worker is from a SSA country. Further the allocation it seems has been changed. i.e. 8.33% needs to be computed on the total salary and not restricted to INR 6,500. It would increase cost of assignment significantly.
Mode of payment of PF	The amount shall be payable only to the members bank account in India	Provision has not been changed but due to deferment of receipt, it becomes practically impossible to recover the amount from PF authorities.