expat workers can now withdraw their provident fund balances only on retirement at 58 years of age a much tighter condition that the government hopes will put pressure on countries such as the us and uk to enter into social security agreementsexpats workers could earlier withdraw their accumulated balances in the provident fund account at the end of their employment in indiathe new regulation will have far reaching consequencesemployers will face higher cost of sending employees to work in india said kaushik mukherjee executive director pwchowever the move will not impact expats from countries that have a totalisation or social security agreement with india creating an incentive for other countries to sign similar agreementsindia has signed nearly 12 social security agreement but only two with belgium and germany are currently operationalindian workers are allowed to withdraw their pf balances under a number of circumstances international workers will be only able to do so on retirement at 58 years against 55 years for local workers according to the latest changes made through an amendment to the employees provident funds scheme 1952however in the case of permanent and total incapacity to work due to metal infirmity withdrawal will be allowedoverseas workers will need to keep their bank account in india till the refunds are received in such accountfor example an foreign worker who completes his employment in india at the age of 50 years will have his contribution blocked for 8 years and will have to keep his bank account open till thenforeigners will be happy leaving their funds in india which will earn nearly 9 return against much lower they can get back homebut there is a new rule expected to come into effect from next april as per which provident fund accounts inactive for than three years will not earn any interest once this rule come into effect this extra return will be available only for three years after an expat leaves indiaindia had in 2008 made it mandatory for expats to contribute to employee provident fund and employee pension scheme same as that for local workersunder these schemes an employee contributes 12 of his basic salary plus dearness allowance and his employer makes a matching contributionwhen an indian company sends an employee on an assignment for 23 years he and his employer have to contribute to the social security system prevalent in that country as also to provident fund back home this has been a big bone of contention between india and the us and to some extent with the ukindia has been for some time trying to convince the us and uk to enter into a totalisation agreement but no deal has been reached so fartotalisation or a social security agreement is a reciprocal program that prevents double payment to social security systems between countrieswhile this puts an additional burden on an employer it does not benefit the employee in any way as in most countries the minimum duration for deriving any benefit is 10 years according to