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The Employees' Provident Fund Organisation (EPFO) has approved a pilot project to automatically settle claims in small, inactive accounts. The objective of this move is to minimize delays and assist members in rapidly recovering funds that have remained unclaimed for a long period. Under this new initiative, the EPFO ​​will automatically process claim settlements for accounts holding an unclaimed balance of ₹1,000 or less; consequently, the account holder will not be required to submit a formal withdrawal request.

In the first phase, approximately 1.33 lakh such accounts—holding a cumulative sum of around ₹5.68 crore—will be covered under this reform initiative. This decision was taken by the Board during its latest (239th) meeting held last Monday. But what exactly are 'inoperative' EPFO ​​accounts, and how does the retirement fund body plan to process transactions associated with them? Let us provide you with a detailed explanation...

What is an Inoperative EPFO ​​Account?
Under EPF regulations, an account is deemed 'inoperative' if no contributions are made to it for a continuous period of three years following either the member attaining the age of 55 or their date of retirement—whichever occurs later. According to data shared during the Board meeting, as of March 31, 2025, there are 31.83 lakh such inoperative accounts, holding a total corpus of ₹10,181 crore. This figure excludes accounts belonging to international workers.

What Changes Have Been Introduced?
Under the pilot project, the EPFO ​​will directly credit the funds into the members' Aadhaar-linked bank accounts that are registered with the organization; this process will not require the submission of any fresh claims or additional documentation. This measure is expected to simplify the withdrawal process and facilitate the speedy disbursement of outstanding dues to members. Based on the success of the pilot project, this facility may subsequently be extended to accounts with a balance exceeding ₹1,000, thereby further strengthening the EPFO's focus on member-centric reforms. The organization stated that this initiative is also expected to facilitate the expedited crediting of long-pending balances, minimize procedural delays, enhance data accuracy, and improve overall service delivery.

What steps is the EPFO ​​taking?
The Union Ministry of Labour is continuously working to simplify processes for users. One such endeavor involves establishing a system that will enable eight crore Employees' Provident Fund (EPF) members to withdraw funds directly using the Unified Payments Interface (UPI). Targeted for rollout by April 2026, this project aims to provide faster access to funds, streamline the withdrawal process, and improve service efficiency.

The report also indicates that the EPFO ​​is working to rectify software glitches within the existing system. If implemented, this initiative could benefit approximately eight crore members, as they currently have to undergo a time-consuming claims process to withdraw funds from their EPF accounts.

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