In a landmark move to enhance flexibility and ease of access for over seven crore account holders, the Employees’ Provident Fund Organisation (EPFO) has introduced a new set of liberalised partial withdrawal rules. The Central Board of Trustees (CBT), chaired by Labour Minister Mansukh Mandaviya, approved these changes during its meeting held on Monday.
The key reforms aim to simplify withdrawal procedures, reduce member grievances, and modernise EPFO’s operations under the EPFO 3.0 initiative. The meeting also marked the launch of the Vishwas Scheme, designed to resolve long-standing disputes and promote trust between the organisation and employers.
Simplified Withdrawal Categories
According to the Ministry of Labour, the EPFO has merged 13 complex withdrawal provisions into a streamlined structure divided into three major categories Essential Needs (covering illness, education, and marriage), Housing Needs, and Special Circumstances.
Under the revised rules, members can now withdraw up to 100 per cent of their accumulated provident fund balance, which includes both employee and employer contributions. The withdrawal limits for education and marriage have been substantially relaxed, allowing up to 10 withdrawals for education and 5 for marriage, compared to the earlier combined limit of just three.
Uniform Minimum Service Requirement
To make access simpler for all, the minimum service period required to qualify for any type of withdrawal has been standardised at 12 months. The EPFO has also removed the requirement for members to provide specific reasons when withdrawing funds under the “Special Circumstances” category a move expected to reduce claim rejections and speed up processing.
Safeguard for Retirement Savings
In order to maintain the long-term objective of retirement security, 25 per cent of every member’s balance will remain protected as a mandatory reserve. This ensures that savings continue to grow at EPFO’s annual interest rate of 8.25 per cent, allowing subscribers to benefit from compound returns while meeting immediate needs.
Faster and Paperless Settlements
The newly rationalised structure aims to enable full automation of withdrawal settlements without requiring any physical documents. Moreover, the timeframe for premature final settlement has been increased from two months to twelve months, while final pension withdrawals will now be allowed after thirty-six months instead of two.
Vishwas Scheme to Resolve Long-Pending Cases
The CBT also cleared the Vishwas Scheme, which targets resolution of outstanding penal damage cases related to delayed provident fund remittances. As of May 2025, more than 6,000 cases worth Rs 2,406 crore were pending across various judicial forums, including the Supreme Court and multiple High Courts.
Under this scheme, penal damages will be reduced to a uniform 1 per cent per month. Defaults of up to two months will attract 0.25 per cent, while those up to four months will be charged 0.50 per cent. The scheme will remain open for six months, with the possibility of another six-month extension. It covers cases under Section 14B that are ongoing, resolved, or pending adjudication. All pending litigations will be withdrawn once compliance under the scheme is completed.
Digital Life Certificate at Doorstep
In another major step toward pensioner convenience, the Board approved a partnership with India Post Payments Bank (IPPB) to deliver doorstep Digital Life Certificate (DLC) services for EPS 1995 pensioners. The service, earlier charged at Rs 50 per certificate, will now be fully funded by EPFO. This initiative will particularly benefit retirees in rural and remote regions by enabling at-home biometric verification and ensuring continuous pension payments.
EPFO 3.0: Towards a Digital Future
The EPFO 3.0 roadmap focuses on creating a hybrid, member-centric digital ecosystem that integrates cloud-native technology, API-first architecture, and microservices for improved efficiency. The goal is to enable instant withdrawals, real-time claim tracking, multilingual self-service, and payroll-linked auto-contributions through a unified digital interface.
Appointment of Fund Managers
The Central Board also finalised the appointment of four Asset Management Companies (AMCs) to manage EPFO’s debt investments for a five-year period. The selected fund houses include SBI Funds Management Limited, HDFC AMC Limited, Aditya Birla Sun Life AMC Limited, and UTI AMC Limited. The move aims to strengthen portfolio diversification and ensure responsible fund management aligned with long-term social security goals.
Key Highlights of EPFO Reforms
| Reform Area | Key Change | Benefit to Members | Implementation Period |
|---|---|---|---|
| Partial Withdrawals | 100% withdrawal permitted | Greater liquidity and access | Immediate |
| Service Requirement | Reduced to 12 months for all categories | Simplified eligibility | Immediate |
| Vishwas Scheme | 1% flat penal damage rate | Reduced litigation for employers | 6 months, extendable |
| Pension Withdrawal | Final pension allowed after 36 months | Smoother retirement access | Immediate |
| Digital Life Certificate | Free doorstep service via IPPB | Convenience for pensioners | Nationwide rollout |
| Fund Management | 4 new AMCs appointed | Improved diversification and returns | 5-year term |
Strengthening Transparency and Member Experience
Labour Minister Mansukh Mandaviya also launched a series of new digital services designed to make EPFO operations more transparent and member-friendly. The reforms are expected to improve efficiency, reduce delays, and provide users with a seamless experience through technology-driven governance.
