The recent social media posts have created a misleading impression regarding the Employees Provident Fund Organisation (EPFO) reforms. These posts are false and assert significant modification of withdrawal eligibility, accessibility to funds and benefits on retirement. Nevertheless, the Ministry of Labour & Employment and EPFO have come up to explain that these allegations are not factual but misconstrued.
What is the Role of EPFO in Social Security?
Employees Provident Fund Organisation (EPFO) has been the biggest social security organisation in India since it offers financial cover to millions of workers in the organised industry. It guarantees savings, retirement and social welfare in the long term. The new reforms will ease the withdrawal regulations and, at the same time, give the members a decent retirement corpus.
Consultation: The proposed changes were finally passed by the Central Board of Trustees (CBT) of EPFO, which is composed of the representatives of the employees, employers, and even the government. These reforms have a balance between offering access to funds with ease and providing long-term financial security.
An X post by @SaketGokhale is making several claims regarding the new EPFO rules.
— PIB Fact Check (@PIBFactCheck) October 15, 2025
➡️These claims are MISLEADING! Here's a point-by-point clarification on these claims👇
Claim 1: Of your EPF balance, 25% cannot be withdrawn and will remain LOCKED IN for your entire career until… pic.twitter.com/1zJSYDRVGK
Old PF Withdrawl Rules vs. New PF Withdrawl Rules
| Feature | Old Rules | New Rules |
| Premature Final Settlement / Pension Withdrawal Timelines | Varied. For example, for marriage, 50% of the employee's share with interest could be withdrawn. For education, it could be availed three times in total. | The final settlement threshold has been moved to 60 days. The pension withdrawal timeline is now 6 months. |
| Minimum Balance Maintenance | Varied. For example, for marriage, a minimum of 7 years of membership was required. | 20% of the Provident Fund (PF) contributions must remain in the account as a minimum balance. |
| Amount of Withdrawal | Varied. For example, for marriage, a withdrawal of 50% of the employee's share with interest was allowed. | Varied. For example, for marriage, a withdrawal of up to 50% of the employee's share is now allowed. |
| Number of Withdrawals | Varied. For example, for marriage, withdrawals were tied to years of membership. | Varied. For example, for educational needs, withdrawals are now allowed up to 3 times. |
| Service Requirement | Varied. For example, for marriage, a minimum of 7 years of service was required. | A uniform minimum service period of 5 years is required for all partial withdrawals. |
| Education & Marriage Withdrawals | A uniform 7 years of service was required for partial withdrawals for these purposes. | Withdrawals for Education Needs & Marriage are allowed up to 3 times. |
| Claim Settlement / Documentation | Required various specific reasons and declarations for all partial withdrawals. | A reason/declaration is now required only for partial withdrawals. |
What are the Simplified New PF withdrawal rules?
Previously, the process of EPF withdrawal was not simple, and it could be characterised by several conditions of eligibility and lengthy waiting lines. There were 13 types of partial withdrawal provisions, and members would be confused, as there were always rejections and delays.
Within the new single structural framework:
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All of the 13 types of partial withdrawal have been consolidated into one, a simplified system.
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The members are now able to withdraw 75 per cent of the amount deemed eligible, including that of the employer, employee contributions, as well as accrued interest.
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The withdrawal age has been cut down to 12 months, as compared to the previous 5-7 years.
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This implies that now employees are able to withdraw larger sums of money at a much earlier age- only after a one-year service.
What are the Ways the Employees Can claim the Safeguarding Long-Term Benefits?
The retirement savings of the members had been decreased by frequent withdrawals in the past. Almost half the number of members had less than 20,000, and 3/4th had less than 50,000 at final settlement. This was the opposite of social security and the strength of compound interest (as of 8.25 per cent.).
To avert this, the CBT consensus was that a quarter of the provident fund was to be held back to achieve a respectable retirement corpus. This guarantees that the members have long-term financial security even after retirement.
What are the other amendments in Unemployment and Retirement Provisions?
Amended Unemployment and Retirement Provisions.
Under the revised rules:
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In the event of unemployment, they are allowed to withdraw three-quarters of the PF balance at an immediate rate and the balance after a year.
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Retirement at 55 years, permanent disability, voluntary retirement, retrenchment or migration to a foreign country are among the situations that are allowed complete withdrawal.
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The structure allows it financial flexibility as well as emergency security.
No Change in Pension Entitlements.
The pension entitlements of the Employees' Pension Scheme (EPS) do not differ.
Key points include:
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The members will be able to draw their retirement fund after 10 years of service, though only those who have served 10 years of EPS membership will be given a monthly pension benefit upon reaching the age of 58 years.
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Currently, the members of pensions withdraw their funds earlier (approximately 75 per cent) and end up losing the benefits of their pensions in future.
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The window of withdrawal has been increased to 36 months and not 2 months to encourage the plan holder to hold the pension over a long period of time.
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This is to make sure that the members, and their families, will still enjoy the protection of pensions even when their death occurs untimely.
Strength and Member Trust of EPFO.
EPFO, which comes under the EPF and MP Act, 1952, extend its coverage to establishments of 20 or above employees who earn a salary of up to 15000 per month. There is a very high participation of EPFO, as shown by 35 per cent of members earning more than 15000 and 15 per cent of establishments which have voluntarily registered with the system.
EPFO is presently operating a huge corpus of 28 lakh crore, which guarantees secure, tax-free and high-yield investments to more than 30 crore members. Its further reforms are directed to digital access, transparency, and efficiency.
What are the myths about the New PF withdrawal rules?
The viral statement that the new rules of EPFO signal an increase in unemployment is utterly untrue.
Official data shows:
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In FY 202425, six point two nine million new workers were added to the payroll.
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In 202324, unemployment decreased to 3.2 compared to 6% in 201718.
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These statistics confirm the efforts made by the government in creating more jobs and economic stability.
Conclusion
The new reforms in the EPFO are to simplify the system of provident funds and make it more transparent and open, and to ensure the long-term financial security of the Indian workforce.
It is suggested that the members consult official EPFO circulars or the notifications of the Ministry of Labour and Employment only to receive the correct information, neglecting the misleading posts on social media.
The EPFO remains one of the pillars of social security that ensures the financial independence, stability, and retirement security of millions of Indian workers.
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