EPFO eases withdrawals: Members can tap 100% of eligible EPF savings

Thirteen rules for withdrawals consolidated to three, as pension manager announces several measures for liberalisation

Employees’ Provident Fund Organisation (EPFO) will allow its members to withdraw up to 100 per cent of eligible balance in their PF accounts, seeking to improve “ease of living”.

 

As many as 13 rules for withdrawals have been consolidated to three, according to a statement issued after a meeting of the organisation’s Central Board of Trustees chaired by Labour Minister Mansukh Mandaviya on Monday, news agency PTI reported.

 

Simplified withdrawal categories

 

PF can be withdrawn for these reasons.

 

• Essential needs. such as illness, education, or marriage 
• Housing 
• Special circumstances, such as unemployment, epidemic, or natural calamity

Members can now withdraw the full eligible balance, covering both employee and employer contributions.

 

PF withdrawals for education are now allowed up to 10 times and for marriage up to five times, compared to a combined cap of three earlier. The minimum service requirement for all partial withdrawals has also been reduced uniformly to just 12 months.

Easier access, fewer rejections

Under “Special Circumstances”, members are no longer required to specify the reasons for partial withdrawals. This simplification aims to reduce claim rejections and improve ease of access.

 

A new rule also mandates maintaining 25 per cent of contributions as a minimum balance, allowing members to continue earning the 8.25 per cent annual interest with compounding benefits, helping them preserve a healthy retirement corpus.

 

Additionally, the period for availing a premature final settlement of EPF has been extended from two months to 12 months, while final pension withdrawal is now allowed after 36 months. 

 

New scheme to curb litigation

EPFO has introduced the Vishwas Scheme, which reduces penal damages for delayed PF payments to a flat 1 per cent per month, with lower rates for shorter delays. The scheme, effective for six months and extendable by another six, covers both pending and pre-adjudication cases.

 

Tech-driven transformation and fund management

In a bid to modernise services, EPFO has launched a member-centric digital framework under EPFO 3.0, integrating core banking, cloud-based systems, and multilingual self-service tools.

 

EPFO has also partnered with India Post Payments Bank (IPPB) to offer doorstep Digital Life Certificate (DLC) services to pensioners, particularly benefiting those in remote areas.

 

To ensure prudent fund management, the board approved the appointment of four fund managers, SBI Funds Management, HDFC AMC, Aditya Birla Sun Life AMC, and UTI AMC to manage its debt portfolio for five years.

 

(With inputs from PTI)