EPF 3.0 withdrawal rules simplified: Minimum service cut and bigger limits for education, marriage - all you need to know

The PF withdrawal rules have been updated for EPFO subscribers. They can now withdraw up to 75% of their EPF corpus while keeping the mandatory minimum balance of 25%.

Union Minister of Labour and Employment, Dr Mansukh Mandaviya, chaired the 238th meeting of the Central Board of Trustees (CBT) of the Employees’ Provident Fund (EPF) on October 13, approving several measures aimed at easing withdrawals and modernising EPF services.

According to a PIB press release, the meeting focused on reforms to improve the quality of life for EPF members.

The board decided to simplify partial withdrawal provisions by merging 13 existing rules into a single framework, categorised into Essential Needs, Housing Needs, and Special Circumstances. “Members can now withdraw up to 100% of the eligible balance in the Provident Fund, including both employee and employer contributions,” the PIB release said.

The minimum service period for all partial withdrawals has been reduced to 12 months, and under ‘Special Circumstances’, members no longer need to specify reasons for withdrawals.

Education and marriage withdrawals have also been liberalised. PIB noted that withdrawals for education can now be availed up to ten times and for marriage up to five times, compared with the previous total limit of three for both combined. A minimum balance provision of 25% of contributions will ensure members retain a substantial retirement corpus while enjoying EPFO’s current interest rate of 8.25% per annum.

The board also approved extending the period for premature final settlement and pension withdrawals. “Premature final settlement of EPF can now be availed after 12 months instead of the earlier two months, and final pension withdrawal after 36 months,” the PIB release added. The reforms are expected to allow members to meet immediate financial needs without compromising retirement savings.

In addition, the board approved a comprehensive digital transformation framework under EPFO 3.0. PIB said, “The hybrid design integrates Core Banking Solutions with cloud-native, API-first, microservices-based modules for account management, ERP, compliance, and a unified customer experience.” This digital upgrade aims to provide faster, automated claims, instant withdrawals, multilingual self-service, and seamless payroll-linked contributions for over 30 crore members.

The CBT also approved the selection of four fund managers to manage EPFO’s debt portfolio for five years. “This decision follows recommendations from the Selection Committee and Investment Committee, ensuring prudent management and diversification of EPFO’s investment portfolio,” PIB noted. The move is intended to safeguard and enhance returns on members’ provident fund savings.