Employees’ Provident Fund Organization (EPFO) has approved a pilot project to automatically settle claims in small non-operative accounts. The move is aimed at reducing delays and helping members recover long-unclaimed funds faster. Under the new initiative, EPFO will automatically process claim settlement for accounts with unclaimed balance of Rs 1,000 or less, without the account holder needing to submit a formal withdrawal request. In the first phase, approximately 1.33 lakh such accounts amounting to approximately Rs 5.68 crore will be covered under this reform initiative, the board decided in its latest (239th) meeting held last Monday. But what are inoperative EPFO accounts, and how does the retirement fund body plan to process transactions related to them? Let us give you detailed information about it…
What is an inoperative EPFO account?
Under EPF rules, if no contribution is made for three consecutive years after the member turns 55 or the date of retirement, whichever is later, the account is considered inoperative. According to the data shared in the board meeting, till March 31, 2025, there are 31.83 lakh non-operative accounts, the total amount of which is Rs 10,181 crore. International workers are not included in this figure.
What changes were made?
Under the pilot project, EPFO will directly credit the amount into the Aadhaar-linked bank accounts of members who are registered with EPFO, without the need for a fresh claim or documentation. This step is expected to simplify the process of withdrawing money and help members get their dues faster. Depending on the success of the pilot project, this facility can later be extended to accounts with balance above Rs 1,000, further strengthening EPFO’s focus on member-centric reforms. The institution said that this initiative is also expected to help in faster crediting of long pending balances, reduce processing delays, improve data accuracy and improve overall service delivery.
What steps is EPFO taking?
The Union Labor Ministry is continuously working to make the process easier for the users. One such effort includes creating a system through which eight crore Employee Provident Fund (EPF) members will be able to withdraw money directly using the Unified Payments Interface (UPI). Targeted for rollout by April 2026, the project aims to provide faster access to funds, simplify withdrawals and improve service efficiency.
The report also states that EPFO is working to fix software glitches in the existing system. If implemented, around eight crore members may benefit as they currently have to go through a time-consuming claim process to withdraw money from their EPF account.