Limited Liquidity.
- EPF funds cannot be withdrawn freely before retirement.
- Full withdrawal is allowed only after two months of unemployment.
- Partial withdrawals are permitted only under specific conditions such as housing, illness, or education.
- Early withdrawal may lead to loss of long-term compounding benefits.
- Restrictions reduce flexibility for urgent financial needs.
Fixed Contribution Structure.
- Contributions are linked to a fixed percentage of basic wages and dearness allowance.
- Employees cannot voluntarily increase contributions under the standard EPF scheme (except through VPF).
- Employers are not required to contribute above the wage ceiling limit.
- This limits the fund growth for higher-income earners.
- The fixed formula may not match individual retirement goals.
Return Limitations.
- EPF offers stable but moderate returns compared to market-linked instruments.
- Interest rates are revised annually and may decline with falling government bond yields.
- The returns may not outpace inflation over long periods.
- There is no scope for choosing investment strategies.
- Members have no control over how funds are invested.
Access Restricted to Salaried Employees.
- EPF is not available to self-employed individuals or informal sector workers.
- Only those employed in registered establishments can participate.
- This limits retirement savings opportunities for a large part of the population.
- Voluntary coverage is permitted but not widely adopted.
- It excludes freelancers, small business owners, and contract workers without formal contracts.
Cumbersome Withdrawal and Transfer Process.
- Delays may occur in claim settlement due to documentation or approval issues.
- Mismatches in personal details can hinder access to funds.
- Transfers between jobs may be slow if employer records are not updated.
- Some members face difficulties due to unlinked or inactive UANs.
Manual intervention is sometimes required despite digitization efforts.



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