EPFO overhauls PF withdrawal rules, moves to single database: CEO

The Employees' Provident Fund Organisation (EPFO) has introduced significant reforms in its claim settlement process, centralised its member database and simplified withdrawal rules, according to CEO Ramesh Krishnamurthi. Speaking at The Hindu MIND, he outlined the changes that aim to make the organisation more member-centric and efficient.

Krishnamurthi emphasised that technology alone is not a solution but an enabler. "Any technological intervention must be supported by changes in processes and the legal framework," he said. The EPFO settled nearly six crore claims in 2024-25 and 8.3 crore in 2025-26, a 30-35% increase with almost the same manpower. This year, it expects to settle nearly 10 crore claims. To manage this growing volume, the organisation has centralised its previously decentralised database, bringing all 123 Regional Offices into a single system. Member IDs are now linked under one Universal Account Number (UAN), making it easier to track total balances and service history.

A major reform is the simplification of withdrawal rules. Earlier, different eligibility periods varied by claim category. Now, a uniform eligibility period of 12 months applies to all claims. The employee's and employer's shares have been merged for withdrawal purposes, as the entire amount belongs to the member. Withdrawal eligibility is now either 75% of the total balance or 100% of the eligible balance after accounting for minimum balance requirements. Members can withdraw in one or multiple instalments without restrictions. These changes required amendments to both internal processes and legal provisions, and have been incorporated into EPFO's software.

Krishnamurthi credited Labour and Employment Minister Mansukh Mandaviya for driving the transformation. "His first instruction to us was to simplify the process," he said. About 80-85% of EPFO members are blue-collar workers earning around ₹15,000 in PF wages, including security guards, data entry operators and sales representatives. The goal was to make it easier for them to access their own money.

Key service improvements include trust-based verification: if a UAN is linked to Aadhaar and KYC is complete, the EPFO accepts the information provided. Bank account validation is done through the National Payments Corporation of India in coordination with banks. The auto-settlement limit has been raised from ₹1 lakh to ₹5 lakh. Additionally, eligibility checks are now performed at the submission stage, reducing rejections to nearly negligible levels.

The reforms are part of a broader update under the Code on Social Security, 2020, which notified new rules for the EPF, EPS and EDLI schemes. These changes come amid ongoing debate over higher pension, social security coverage and the financial sustainability of the pension fund.

Krishnamurthi noted that simplicity is key to the new approach. The EPFO aims to be fully digital, paperless and member-centric, ensuring that workers can claim their provident fund without unnecessary hurdles. The organisation's push towards automation and process reform reflects a shift from reactive claim handling to a proactive, user-friendly model.