In a major move aimed at simplifying provident fund services, the Employees' Provident Fund Organisation (EPFO) will soon automate the settlement of final provident fund (PF) withdrawal claims, enabling faster transfers of money directly to applicants' bank accounts.
The announcement was made on May 13 by Central Provident Fund Commissioner Ramesh Krishnamurthi during ASSOCHAM's National Seminar on New Labour Codes. The move is expected to benefit EPFO's more than seven crore members, making PF withdrawals quicker and reducing paperwork.
At present, EPFO processes partial or advance PF withdrawal claims of up to ₹5 lakh through the auto mode, with claims generally settled within 3 days of filing. However, this facility has so far been limited to advanced withdrawals.
Krishnamurthi said EPFO is now preparing to expand this automated system to include final PF withdrawals, allowing eligible members to receive their money faster without lengthy processing delays.
"We are also going to initiate, as far as feasible, auto settlement for now, which was only for advances. Now, we are going in for auto settlement of final withdrawals," he said.
Automatic PF Transfers When Employees Switch Jobs
In another significant reform, EPFO is also planning to introduce automatic transfer of provident fund accounts when employees change employers.
Currently, workers are often required to submit forms to transfer their PF balance from one employer account to another after changing jobs. Under the proposed system, this process will become automatic.
"You don't have to file a form anymore. We try to auto-migrate your accounts to your latest member account," Krishnamurthi said, adding that EPFO is moving towards auto-settlement and auto transfer of PF accounts to make the process seamless for members.
The reform is expected to eliminate delays and paperwork commonly faced by salaried employees during job transitions.
New Labour Codes to Be Operationalised
Speaking at the seminar, Krishnamurthi also highlighted efforts to fully operationalise the four new labour codes by publishing rules under them. The government had already notified the four labour codes on May 8.
He said the reforms aim to simplify, codify and standardise definitions and labour-related provisions, making compliance easier while modernising labour regulations.
"The next set of notifications that pertain specifically to the EPFO would be published shortly," he added.
Three Major Schemes to Be Re-Notified
Under the new legal framework, EPFO will also re-notify three major schemes:
EPF Scheme, 1952
Employees' Deposit Linked Insurance Scheme, 1976
Employees' Pension Scheme, 1995
Krishnamurthi clarified that there are no major structural changes planned in these schemes. Instead, EPFO has focused on incorporating lessons from past experiences and recent policy decisions.
"We have not gone in for major changes. We have tried to integrate all the learnings from the past," he said.
According to him, the revised schemes will include recent Central Board of Trustees-approved decisions, including measures to simplify withdrawals and a major overhaul of provisions related to exempt trusts.
Government Focused on Balancing Reforms and Worker Welfare
Union Labour Secretary Vandan Gurnani, who also addressed the seminar, said labour falls under the Concurrent List of the Constitution, meaning states will frame their own rules under the labour codes.
She said the government's approach has been to strike a balance between reducing compliance burdens, improving ease of doing business, supporting business expansion, and ensuring that workers are not disadvantaged.
"The philosophy of the government has been to balance compliance reduction, ease of doing business, ease of expanding business and ensuring that the workers are not shortchanged," she said.
Gurnani also stressed that industries should not treat labour reforms merely as a compliance checklist but as a broader commitment to employee welfare.
"The bonus is now on the industry to ensure that reform is not just viewed as a compliance checklist, but it is a commitment to dignity, a commitment to a happy, healthy and productive workforce," she added.
With the proposed automation of final PF withdrawals and account transfers, EPFO's latest reforms are expected to make fund management faster, more efficient, and hassle-free for millions of employees across the country.
