EPFO Liberalises EPF Partial Withdrawals: Members Can Now Withdraw Up to 100%

EPFO Liberalises EPF Partial Withdrawals: On Monday, the body EPFO which handles the retirement funds of its over seven crore subscribers approved liberalised part withdrawals of its subscribers enabling them to take up to 100 per cent EPF withdrawal.

The highest decision-making body of EPFO, the Central Board of Trustees (CBT), which is headed by the Labour Minister Mansukh Mandaviya, made some groundbreaking decisions in its meeting, according to a statement given by the Labour Ministry on Monday.

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In order to improve the Ease of Living of the EPF members, the CBT resolved to consolidate 13 intricate provisions of the EPF Scheme into a single and simplified rule classified into three namely, Essential Needs (illness, education, marriage), Housing Needs, Special Circumstances.

This time members can withdraw 100 per cent of the credible sum in the Provident Fund, each of employee and employer share.

Liberalisation of withdrawal limits has been madeup to 10 times education and 5 times marriage (out of the current limit of a combination of 3 partial withdrawals of marriage and education in total).

Minimum service has been evenly adjusted to just 12 months of all partial withdrawals.

In Special Circumstances, the member was previously expected to explain the causes of partial withdrawals viz. natural calamity, lockouts/establishment closures, constant unemployment, epidemic outbreak, etc.

This was usually translated into dismissal of assertions and eventual complaints.

The member is now able to make an application without attributing any reasons under this category.

It has been provided that 25 per cent of the contributions in the Members account should be earmarked as Minimum Balance to be kept by the member at all times.

This will allow the member to get a high rate of interest charged by EPFO (currently 8.25% pa) and will have compounding benefits added to his or her retirement corpus.

This rationalization makes the accessibility much easier and the members are assured of a high enough pension fund.

The simplification of the scheme provision and increased flexibility and no requirement of any documents will open the door to 100 per cent of claims of partial withdrawal to be auto settled and the ease of living assured.

In conjunction with the above, it is also determined to amend the period of availing premature final settlement of EPF, which is 2 months at present to 12 months and final pension withdrawal, which is 2 months at present to 36 months.

Liberalization of the partial withdrawals guarantees the members to be able to satisfy their instant financial requirements without jeopardizing their retirement savings or pension rights.

The EPFO has also implemented the so-called Vishwas Scheme to cut on litigation by rationalised penalty damages.

According to the ministry, this has been identified to be one of the greatest causes of litigations due to imposing damages on late remittance of the PF dues.

By May 2025 the pending penal damages were at 2406 crores and more than 6000 cases pending in forums, among them the High Courts, CGITs and the Supreme Court.

Moreover, close to 21,000 cases of possible litigation are awaiting under the e-proceedings portal of EPFO.

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The penal damages under Vishwas Scheme will be pegged at a flat rate of 1 per cent per month except on graded rate of 0.25 per cent default within a period of 2 months and 0.50 per cent default within a period of 4 months.

The scheme would be in force six months and can be renewed to six months.

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

All pending cases will be abated, in case of compliance under the Vishwas Scheme.

The Board has consented to sign an MoU with India Post Payments Bank (IPPB) to offer door step Digital Life Certificate (DLC) services to EPS95 pensioners at a fee of 50 per certificate, which is entirely paid by EPFO.

The venture will enable pensioners in remote and rural locations to provide their life certificates over IPPB at no cost by using the expansive postal network across the country.

The joint venture seeks to increase the comfort of the old age pensioners, continuity of pension in a timely fashion, the initiation of pension schemes and better accuracy in the Centralised Pension Payment System (CPPS).

CBT accepted a holistic member-focused digital transformation framework as a component of EPFO 3.0 to modernize the provident fund services.

The hybrid design will combine an established Core Banking Solution with cloud-native, API-first, micro services-based account management, ERP, compliance and a single customer experience modules.

The implementation will be done in phases and secure, scalable and uninterrupted services will be provided.

The scheme will help in accelerating and automating claims, instant withdrawals, self-service in various languages and smooth payroll-based contributions reasserting the EPFO vision of providing transparent, efficient and technology-based services to the more than 30 crore members.

Four Fund Managers have been chosen by the Central Board to manage debt portfolio of EPFO in a period of five years.

The endorsement is made according to the suggestions of the Selection Committee and the further confirmation in the Investment Committee, who are the members of the Central Board, senior officers and an external investment expert.

The prudent move that this decision entails is to have a diversified investment portfolio of EPFO that will serve to protect and optimise the returns on the provident fund savings of members in accordance with the long-term investment goal set by the organisation.

In the meeting, Mandviya launched a rollout of various noteworthy digital projects of EPFO, to improve efficiency, transparency and user experience in the service delivery. PTI KKS 1.0.

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