- The government has introduced a 36-month waiting period for withdrawal benefits under the Employees' Pension Scheme (EPS), as confirmed in Parliament.
- EPFO is implementing significant digital reforms to ease the withdrawal process, including auto-settlement for final PF withdrawals up to ₹5 lakh.
- Auto-settlement limits for final PF withdrawals have been increased to ₹5 lakh from ₹1 lakh, ensuring faster access to funds.
- Digital claim settlement is being strengthened to ensure timely payment of admissible advances, as stated by the Labour Ministry.
- In 2025, EPFO merged 13 partial-withdrawal provisions into three categories and reduced the minimum service requirement to 12 months.
- EPFO's October 2025 data revealed that 50% of members had less than ₹20,000 in their PF balance, and 75% had less than ₹50,000 at final settlement.
- Passbook Lite was launched in 2025, allowing members to view their PF contributions, withdrawals, and balance directly.
The EPFO's new 36-month waiting period for EPS withdrawals aims to streamline pension fund management while addressing member hardships through digital reforms. The government confirmed this change in a Lok Sabha session on August 10, 2026, amidst concerns from employees and unions regarding the impact of these amendments.
The auto-settlement limit for PF withdrawals has been raised to ₹5 lakh, allowing members to access larger sums more quickly. The reforms also include a commitment to same-day or two-day claim settlements, with penalties for delays beyond 20 days. The Central Provident Fund Commissioner, Ramesh Krishnmurthi, noted that the auto-settlement provision will soon extend to final withdrawals after employment.
The government emphasized that members can withdraw up to 75% of their balance under three categories: essential needs, housing needs, and special circumstances. The 2025 reforms simplified the withdrawal process by merging 13 provisions into these three broad categories, reducing the minimum service requirement for partial withdrawals to 12 months.
Despite the introduction of the waiting period, the government has not indicated plans to roll it back. Instead, it is focusing on strengthening grievance redressal and digital claim settlements to ensure timely payments. The EPFO reported that 31,11,343 members prematurely closed their pension accounts in FY 2022-23, highlighting the need for these reforms.4
The October 2025 CBT minutes reveal that the 36-month EPS withdrawal proposal was unanimously approved, reflecting a consensus on the necessity of these changes to manage the pension fund effectively.
“The 36-month wait applies to EPS withdrawal benefits, but members can withdraw up to 75% of their balance twice a year for special circumstances without assigning reasons. EPFO data shows 31,11,343 members prematurely closed pension accounts in FY 2022-23, with 75% doing so within four years.”
theweek.in
