EPFO Simplifies Provident Fund Rules, Permits 100% Withdrawal

The Employees' Provident Fund Organisation (EPFO) has simplified its withdrawal rules, allowing members to take out up to 100 per cent of their EPF balance. This aims to make it easier for over seven crore members to access their savings while securing their retirement.

The decision came at the 238th meeting of the Central Board of Trustees (CBT), chaired by Union Labour and Employment Minister Mansukh Mandaviya.

Simpler And Flexible Withdrawals

EPFO has combined 13 separate withdrawal rules into one, making it easier for members to understand and use. Withdrawals now fall under three categories: Essential Needs (illness, education, marriage), Housing Needs, and Special Circumstances.

Key changes include:

• Members can now withdraw up to 100 per cent of their EPF balance, including employee and employer contributions.
• Education withdrawals are allowed up to 10 times, and marriage withdrawals up to five times (earlier, the combined limit was three)
• The minimum service period for any partial withdrawal is now 12 months.
• Under Special Circumstances, members no longer need to give reasons for withdrawal.

EPFO has also set aside 25 per cent of the total balance as a minimum amount that must remain in the account. This will help members continue earning the 8.25 per cent annual interest and build a strong retirement fund.

The new rules will enable automatic settlement of withdrawal claims with no documents required.

EPFO also increased the waiting time for final EPF withdrawal from two months to 12 months, and for final pension withdrawal from two months to 36 months.

Vishwas Scheme to Settle Old Disputes

EPFO launched the 'Vishwas Scheme' to reduce legal disputes over delayed PF payments. Currently, about Rs 2,406 crore in penal damages are pending across 6,000 court cases, with another 21,000 cases waiting under the e-proceedings system.

Under the new scheme

• Penal damages will be charged at 1 per cent per month, with lower rates for shorter delays: 0.25 per cent for up to 2 months and 0.5 per cent for up to 4 months.
• The scheme will run for six months, extendable by another six.
• It will cover all ongoing and pending cases under Section 14B of the EPF Act.
• Once the dues are paid, all related cases will be closed automatically.

Digital Life Certificates

EPFO will partner with India Post Payments Bank (IPPB) to provide doorstep Digital Life Certificate (DLC) services for EPS-95 pensioners. Each certificate will cost Rs 50, which EPFO will bear.

EPFO 3.0

EPFO has also launched EPFO 3.0, a major digital upgrade. The new system will use a Core Banking Solution and cloud-based technology to provide faster, more secure, and user-friendly services.

It will offer:

• Instant claim settlements and withdrawals
• Multilingual self-service options
• Automatic payroll-linked contributions.

The upgrade will help EPFO serve over 30 crore members more efficiently.

The Board also selected four new Fund Managers to handle EPFO's debt investments for the next five years.