EPFO Automated Withdrawal Of Retirement Funds Coming Soon, Relief For Subscribers

The Employees' Provident Fund Organisation (EPFO) is set to extend the auto-withdrawal facility for the final retirement fund soon. To improve efficiency, transparency, and subscribers’ convenience, the retirement fund body is transitioning to a fully automated settlement process for final provident fund withdrawal. This facility will enable the direct transfer of subscribers’ PF amounts to their bank accounts.

This will eliminate administrative and operational delays in the process, which have been one of the main reasons for EPFO subscribers’ grievances.

Currently, EPFO’s auto-settlement mechanism is restricted to partial or advance withdrawal claims of up to Rs 5 lakh, which typically carry a three-day deadline from the time of filing. However, according to Ramesh Krishnamurthi, the Central Provident Fund Commissioner, the organisation is now ready to expand this facility to final retirement funds, reported PTI.

Speaking at a national seminar on New Labour Codes hosted by ASSOCHAM, Krishnamurthi confirmed that soon the EPFO plans to start auto-settlement for final withdrawals and also the auto-transfer of PF accounts when a member shifts employers.

These developments will impact over seven crore subscribers of EPF across the country. Krishnamurthi emphasised that the goal is to create a system where employees will not be required to file complex forms to transfer their PF savings between jobs. Instead, the system will auto-migrate funds to a member’s latest active PF account.

This digital overhaul is in line with the new labour codes that were notified on May 8. EPFO is expected to issue its updated notification soon.

The three schemes under the EPFO: the EPF Scheme 1952, the Employees' Deposit Linked Insurance (EDLI) Scheme 1976, and the Employees' Pension Scheme (EPS) 1995, will all be renotified under the new legal landscape. Krishnamurthi noted that while the organisation has not pursued structural changes, the new schemes will integrate years of operational learning and recent decisions by the Central Board of Trustees (CBT), such as including the exempted trusts provisions into the new schemes.

Reportedly, the change is just one added feature for the subscribers, but for the regulatory body, it is much more than just a software update. For EPFO, it would be a complete renotification of the organisation’s legal framework.

According to Union Labour Secretary Vandana Gurnani, labour remains on the concurrent list in the Constitution, meaning states will also need to frame their respective rules to complement these changes. She explained that the idea is to strike a balance between reducing compliance burdens for businesses and ensuring that workers are not shortchanged.

Gurnani urged the industry to look at these changes as a commitment to the dignity, health, and productivity of the employees, instead of just a compliance checklist. With automation of retirement fund withdrawal, EPFO’s focus currently is to improve subscribers’ experience and ease of doing business for employers while protecting the financial security of Indian employees.

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