EPFO Rule Change: EPFO New withdrawal Rules Explained — Here’s what has changed

EPFO Rule Change: EPFO New withdrawal Rules Explained — Here’s what has changed

NEW DELHI: The Employees’ Provident Fund Organization (EPFO) has announced major changes to its Provident Fund (PF) and Pension Scheme (EPS) withdrawal rules.

The new rules aim to provide members with more financial flexibility without compromising their retirement security. These new rules will simplify the process, ease withdrawal conditions, and promote long-term savings discipline.

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Under the new rules, employees who lose their jobs can now withdraw up to 75% of their EPF balance immediately, while the remaining 25% becomes available after 12 months of unemployment.

EPFO has also introduced a minimum balance requirement, ensuring that at least 25% of the total EPF corpus remains in the account during the waiting period. This retained amount will continue to earn interest, help to save for retirement savings.

EPFO has also simplified withdrawal categories, merging the earlier 13 provisions into just three main groups — Essential Needs (such as illness, education, or marriage), Housing Needs, and Special Circumstances.

The minimum service period for partial withdrawals has also been reduced to 12 months, allowing employees quicker access to funds.

However, full withdrawal from the Employees’ Pension Scheme (EPS) will now require a 36-month waiting period, up from the previous two months.

This extension is intended to encourage members to retain their pension benefits for long-term security. Employees with at least 10 years of service will continue to be eligible for a pension at age 58, even if they are unemployed.

EPFO has also introduced partial withdrawals from the EPS corpus for urgent situations such as medical or housing needs, providing flexibility without compromising the retirement fund.