EPFO Allows 100% Partial Withdrawals, Simplifies Rules for Members
The retirement fund body liberalises EPF withdrawal norms, merges 13 provisions into 3 categories, and launches ‘Vishwas Scheme’ to cut litigation and boost ease of living
In a major reform, the Employees’ Provident Fund Organisation (EPFO) has approved liberalised partial withdrawal norms, allowing members to withdraw up to 100 per cent of their eligible EPF balance under simplified rules.
The Central Board of Trustees (CBT), chaired by Union Labour Minister Mansukh Mandaviya, cleared the proposal on Monday, merging 13 complex provisions into three simplified categories — Essential Needs (illness, education, marriage), Housing Needs and Special Circumstances.
Under the new system, members can withdraw up to 100 per cent of the eligible balance, including both employee and employer contributions. Withdrawal limits have been eased — education withdrawals are now allowed up to 10 times and marriage up to 5 times the previous limit. The minimum service requirement has also been uniformly reduced to 12 months for all partial withdrawals.
In a key change, members applying under “Special Circumstances” will no longer need to state specific reasons such as natural calamity, lockdown, or unemployment. However, 25 per cent of the balance must remain as a minimum reserve to maintain retirement savings and interest accrual at the current 8.25% rate.
The Labour Ministry said these changes will allow 100 per cent automated claim settlements for partial withdrawals, improving ease of access for more than seven crore EPF subscribers.
The CBT also approved the ‘Vishwas Scheme’ to reduce litigation by rationalising penal damages on delayed PF remittances. The scheme, effective for six months and extendable, lowers the penalty rate to 1% per month, with graded relief for short delays. It covers over 6,000 pending cases and Rs 2,406 crore in outstanding damages.
Additionally, EPFO will sign an MoU with India Post Payments Bank (IPPB) to deliver Digital Life Certificates (DLCs) at pensioners’ doorsteps for free, benefiting retirees in remote areas.
As part of the EPFO 3.0 digital transformation, the board approved a hybrid cloud-based framework integrating core banking, compliance, and multilingual self-service modules for faster claims and withdrawals.
To ensure sound investment management, the CBT selected four fund managers — SBI Funds Management, HDFC AMC, Aditya Birla Sun Life AMC, and UTI AMC — to manage EPFO’s debt portfolio for five years.
Mandaviya said the decisions reaffirm the government’s commitment to “transparency, flexibility, and technological modernization” in safeguarding and growing members’ retirement savings.
