EPFO Approves Major Reforms to Modernise Operations, Simplify Member Access, and Cut Litigation Burden
SDG 1: No Poverty | SDG 8: Decent Work and Economic Growth
Institutions: Ministry of Labour & Employment | Employees’ Provident Fund Organisation (EPFO)
The Employees’ Provident Fund Organisation (EPFO), under the Ministry of Labour & Employment, has approved a series of structural and procedural reforms at its 238th Central Board of Trustees (CBT) meeting. The measures aim to modernise EPF operations, simplify withdrawals, enhance service delivery, and ease compliance-related litigation.
The Board approved consolidation of 13 partial-withdrawal provisions into three categories—Essential Needs (illness, education, marriage), Housing Needs, and Special Circumstances—allowing members to withdraw up to 100% of eligible balances (employee + employer share). Service-length requirements were reduced to 12 months, and frequency caps liberalised (education 10 times, marriage 5 times). Members may also withdraw funds under “special circumstances” without mandatory reason disclosure.
To safeguard retirement savings, 25% of corpus must remain intact in each account to retain long-term benefits and interest accrual. The Board also approved the ‘Vishwas Scheme’, which standardises penal-damage rates for delayed PF remittances (1% per month; graded lower for minor delays) to resolve pending Section 14B cases and reduce litigation.
EPFO additionally partnered with India Post Payments Bank (IPPB) to deliver doorstep Digital Life Certificate services for pensioners at a nominal charge, and cleared the selection of four fund managers for its debt portfolio to strengthen investment oversight.
The reforms mark a decisive shift toward a member-centric, technology-driven EPF system that balances withdrawal flexibility with fiscal prudence, simplifies employer compliance, and improves trust in India’s social-security architecture.
What is the Vishwas Scheme? → The Vishwas Scheme is a time-bound dispute-resolution mechanism launched by EPFO to settle long-pending penalty cases under Section 14B. Employers can regularise defaults by paying reduced, fixed-rate penal damages (1% per month; 0.25–0.5% for minor delays). Compliance under the scheme leads to abatement of related litigation, fostering voluntary adherence and easing backlog.
Relevant Question for Policy Stakeholders: How can EPFO sustain these efficiencies while ensuring corpus stability and preventing misuse of withdrawal liberalisation?
Follow the full news here: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2178522