EPFO liberalises rules, allows up to 100 pc EPF withdrawal

The board of retirement fund body EPFO on Monday approved liberalised part withdrawals for over seven crore subscribers, allowing up to 100 per cent EPF withdrawal.

Trustee board takes key calls

According to a Labour Ministry statement issued on Monday (October 13), the Central Board of Trustees (CBT), the apex decision-making body of EPFO, headed by Labour Minister Mansukh Mandaviya, took several path-breaking decisions during its meeting.

To enhance the Ease of Living of EPF members, the CBT decided to simplify the partial withdrawal provisions of the EPF Scheme by merging 13 complex provisions into a single, streamlined rule categorised into three types – Essential Needs (illness, education, marriage, etc.), Housing Needs, and Special Circumstances.

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Now, members will be able to withdraw up to 100 per cent of the eligible balance in the Provident Fund, including employee and employer share.

Liberalised withdrawal limits

Withdrawal limits have been liberalised—education withdrawals allowed up to 10 times and marriage up to five times (from the existing limit of a total of three partial withdrawals for marriage and education in all).

The requirement for minimum service has been uniformly reduced to only 12 months for all partial withdrawals.

Earlier, under ‘Special Circumstances,’ the member was required to clarify the reasons for partial withdrawals viz., natural calamity, lockouts/closure of establishments, continuous unemployment, outbreak of epidemic, etc.

This often led to rejection of claims and consequent grievances.

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Now, the member can apply without assigning any reasons under this category.

Minimum balance requirements

A provision has been made for earmarking 25 per cent of the contributions in the Members’ account as Minimum Balance to be maintained by the member at all times. This will enable the member to enjoy a high rate of interest offered by EPFO (presently 8.25 per cent pa) along with compounding benefits to accumulate a high-value retirement corpus.

This rationalisation enhances ease of access while ensuring members maintain a sufficient retirement corpus.

Scheme provision simplification along with greater flexibility and zero need for any documentation, will pave the way for 100 per cent auto settlement of claims for partial withdrawal and ensure ease of living.

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Complementing the above, it is also decided to change the period for availing premature final settlement of EPF from the existing two months to 12 months and final pension withdrawal from two months to 36 months.

The liberalisation of partial withdrawals ensures members can meet immediate financial needs without compromising their retirement savings or pension entitlements.

Vishwas Scheme

The EPFO has also rolled the 'Vishwas Scheme’ to reduce litigation through rationalised penal damages.

The ministry explained that one of the major reasons for litigation has been the imposition of damages for belated remittances of PF dues.

As of May 2025, outstanding penal damages stand at Rs 2,406 crores, with over 6000 cases pending across forums, including high courts, CGITs, and the Supreme Court.

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Further, nearly 21,000 potential litigation cases are pending under EPFO’s e-proceedings portal.

Under the Vishwas Scheme, the rate of penal damages will be reduced to a flat rate of 1 per cent per month, except for a graded rate of 0.25 per cent for default up to 2 months and 0.50 per cent for default up to 4 months.

The scheme shall remain in operation for six months and is extendable by another six months.

The scheme covers ongoing litigation cases under Section 14B (pending in CGIT, High Courts, or Supreme Court), Finalised but unpaid 14B orders, and Pre-adjudication cases (where notice has been issued but final order is pending).

All cases pending shall stand abated, in case of compliance under the ‘Vishwas Scheme.

Doorstep services for pensioners

The Board has approved signing an MoU with India Post Payments Bank (IPPB) to provide doorstep Digital Life Certificate (DLC) services to EPS’95 pensioners at a cost of Rs 50 per certificate, fully borne by EPFO.

This initiative will allow pensioners, especially in rural and remote areas, to submit their life certificates from home through IPPB’s vast postal network, free of charge.

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The partnership aims to enhance ease of living for elderly pensioners, ensure timely pension continuity, enable quicker family pension initiation, and improve accuracy under the Centralised Pension Payment System (CPPS).

As part of EPFO 3.0, CBT approved a comprehensive member-centric digital transformation framework to modernize provident fund services.

The hybrid design integrates a proven Core Banking Solution with cloud-native, API-first, micro services-based modules for account management, ERP, compliance, and a unified customer experience.

Implementation will proceed in phases, ensuring secure, scalable, and uninterrupted services.

The initiative will enable faster, automated claims, instant withdrawals, multilingual self-service, and seamless payroll-linked contributions, reaffirming EPFO’s commitment to transparent, efficient, and technology-driven service delivery for over 30 crore members.

Fund managers for debt portfolio

The Central Board has approved the selection of four Fund Managers for managing the debt portfolio of EPFO for a period of five years.

The approval follows the recommendations of the Selection Committee and subsequent endorsement by the Investment Committee, comprising members of the Central Board, senior officers, and an external investment expert.

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This decision marks a significant step towards ensuring prudent management and diversification of EPFO’s investment portfolio, aimed at safeguarding and enhancing returns on members’ provident fund savings in line with the organisation’s long-term investment objective.

During the meeting, Mandviya inaugurated a series of key digital initiatives of EPFO, aimed at enhancing efficiency, transparency, and user experience in service delivery.

(With inputs from agencies)