Pledging PF to buy home may soon become reality

Retirement fund body EPFO may soon introduce a scheme to allow its over 4 crore subscribers to pledge their provident fund to buy low-cost houses and use the account to pay equated monthly instalments.

“We are working on a housing scheme for members of the Employees’ Provident Fund Organisation (EPFO). Under it, members will be allowed to pledge their PF accumulations to buy homes,” Labour Secretary Shankar Aggarwal told PTI.

He added that the proposal will be placed before the EPFO’s Central Board of Trustees meeting expected next month.

Once approved by the CBT, the scheme will be available for the subscribers.

Finer points of the scheme, as to what extent subscribers will be eligible to avail loans and what will qualify as a low cost house, are yet to be worked out.

Aggarwal further said: “We don’t want to impose anything on the subscribers. Therefore, we will not buy land or build houses for them. They will be free to choose their own homes from the open market.”

The panel had suggested this scheme for low income formal workers who are EPFO subscribers and could not buy a house during their entire service period. Under the scheme, there will be a tripartite agreement between member, bank/housing agency and EPFO for pledging future PF contributions as EMI payment. — PTI