Dr Mandaviya Chairs 238th EPFO Board Meeting; Approves Major Reforms and Digital Initiatives

In a landmark move to modernize India’s social security ecosystem and enhance the ease of living for millions of workers, the Union Minister for Labour & Employment and Youth Affairs & Sports, Dr. Mansukh Mandaviya, chaired the 238th meeting of the Central Board of Trustees (CBT), Employees’ Provident Fund (EPF) in New Delhi today. The meeting witnessed several path-breaking policy decisions aimed at simplifying EPF withdrawal processes, reducing litigation through rationalized penalties, expanding digital access for pensioners, and strengthening EPFO’s digital infrastructure.

The meeting was attended by Sushri Shobha Karandlaje, Union Minister of State for Labour & Employment and MSME (Vice-Chairperson), Ms. Vandana Gurnani, Secretary, Labour & Employment (Co-Vice-Chairperson), and Mr. Ramesh Krishnamurthi, Central Provident Fund Commissioner and Member Secretary, among other senior officials.

Major Policy Reforms Approved by the Board

1. Simplification and Liberalization of EPF Partial Withdrawals

To improve member convenience and enhance the “Ease of Living”, the CBT approved a major simplification of partial withdrawal provisions under the EPF Scheme. Thirteen complex rules have now been merged into a single streamlined framework, categorized into three key areas:

• Essential Needs: For illness, education, and marriage.

• Housing Needs: For home purchase, construction, or repayment.

• Special Circumstances: For emergencies like unemployment or natural disasters.

The revised rules offer unprecedented flexibility to EPF members:

• Members can now withdraw up to 100% of the eligible balance, including employer and employee contributions.

• Education withdrawals are permitted up to 10 times and marriage-related withdrawals up to 5 times, compared to the earlier cumulative limit of three.

• The minimum service requirement has been uniformly reduced to 12 months across all categories.

• Members can now make partial withdrawals under “special circumstances” without the need to specify reasons, eliminating bureaucratic hurdles and reducing claim rejections.

• A Minimum Balance Rule mandates that 25% of total contributions must remain intact to ensure long-term corpus growth and enjoy the current 8.25% annual interest rate with compounding benefits.

This major reform ensures 100% auto-settlement of claims, zero paperwork, and instant claim processing through automation, marking a major leap forward in EPFO’s digital service transformation.

2. Launch of the ‘Vishwas Scheme’ to Reduce Litigation

To address the growing backlog of litigations related to penal damages for delayed provident fund remittances, the Board introduced the ‘Vishwas Scheme’, a time-bound reconciliation initiative.

Key features of the scheme include:

• Reduction of penal damages to a flat 1% per month, with a graded rate of 0.25% for defaults up to two months and 0.50% for defaults up to four months.

• Applicable to all cases pending under Section 14B of the EPF Act — including those in litigation, pre-adjudication, or finalized but unpaid.

• All pending cases will be closed upon compliance under the scheme, significantly cutting down legal burdens.

• The scheme will operate for six months, extendable by another six months based on response.

As of May 2025, the total outstanding penal damages amounted to ₹2,406 crore, with over 6,000 cases pending in courts and 21,000 under e-proceedings. The rationalization of penalties will not only ease employer compliance but also accelerate the recovery and reinvestment of funds, enhancing returns for EPF members.

“The Vishwas Scheme will instill confidence and reduce friction between employers and the EPFO. By promoting voluntary compliance and fairness, it strengthens trust in the system,” said Dr. Mandaviya.

3. EPFO–India Post Payments Bank (IPPB) Partnership

In a significant welfare step for pensioners, the Board approved a Memorandum of Understanding (MoU) with India Post Payments Bank (IPPB) to provide doorstep Digital Life Certificate (DLC) services under Employees’ Pension Scheme (EPS’95).

• Pensioners, especially those in rural and remote areas, will be able to submit life certificates from home using IPPB’s vast postal network.

• The service will cost ₹50 per certificate, entirely borne by EPFO.

• This facility ensures timely pension disbursal, faster family pension initiation, and improved accuracy under the Centralised Pension Payment System (CPPS).

4. EPFO Digital Transformation Framework – EPFO 3.0

CBT approved a comprehensive digital transformation blueprint under the EPFO 3.0 initiative, aimed at modernizing and integrating provident fund services with cutting-edge technology.

• A Core Banking Solution (CBS) will be integrated with cloud-native, API-first microservices architecture.

• The framework will support instant withdrawals, multilingual self-service, and automated compliance, ensuring transparency and real-time updates.

• A phased rollout will guarantee security, scalability, and uninterrupted service delivery to more than 30 crore members.

5. Appointment of Four Portfolio Managers

The Board approved the selection of four professional fund managers for handling EPFO’s debt investment portfolio for the next five years. The decision, endorsed by the Investment Committee, aims to ensure diversification and long-term sustainability of the provident fund corpus.

This move will enhance risk management and returns for members while maintaining EPFO’s commitment to prudent and secure fund management.

Key Digital and Operational Initiatives Launched

During the meeting, Dr. Mandaviya inaugurated several new digital modules and systems designed to improve efficiency and transparency across EPFO operations:

• Re-engineered Return Filing Module: Streamlined the Electronic Challan-cum-Return (ECR) process into a four-step workflow, reducing errors, simplifying employer compliance, and ensuring real-time updates to member accounts.

• Re-engineered User Management Module: Strengthened system security, simplified user access, and enabled district-level EPFO office creation through digital configuration — a feature missing since 2017.

• Upgradation of e-Office (Version 6 to 7): Improved document management and faster file processing for services like higher pension cases, special demographic corrections, and Appendix-E processing.

• Implementation of SPARROW: Introduced the Smart Performance Appraisal Report Recording Online Window, a fully digital APAR management system for EPFO officers and staff.

Progress Updates and Global Recognition

The Board was briefed on several landmark achievements and developments under EPFO’s leadership:

• Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY): Launched by Prime Minister Narendra Modi on August 15, 2025, the ₹99,446 crore initiative aims to create 3.5 crore jobs between 2025–27. Over 6 lakh first-time employees and 79,098 establishments benefited in its first month.

• Global Recognition: India was awarded ‘Outstanding Achievements in Social Security 2025’ at the World Social Security Forum in Malaysia, recognizing the expansion of social security coverage from 19% in 2015 to 64.3% in 2025 (940 million citizens).

• International Cooperation: India became a member of the ISSA Bureau for the first time and will chair the Working Group on Coverage Extension, strengthening its leadership in global social security reforms.

• India–UK DCC Agreement: Enables short-term Indian professionals deputed abroad to contribute PF in their home country, reducing financial burdens on employees and employers.

• Digital Reforms: Introduction of Passbook Lite, online Annexure K, and face authentication (FAT) for UAN activation via UMANG App, promoting transparency and accessibility.

• Infrastructure Expansion: New regional and zonal offices inaugurated, with multiple land acquisitions approved to extend EPFO’s physical service network.

A New Era of Inclusive and Tech-Driven Social Security

Summing up the meeting, Dr. Mansukh Mandaviya reiterated the government’s commitment to creating a modern, transparent, and inclusive social security system.

“EPFO is evolving into a digital, member-centric institution. Our reforms simplify life for workers, empower employers with predictable compliance systems, and strengthen trust in India’s social security framework,” the Minister stated.

With reforms spanning policy simplification, technology adoption, financial discipline, and international engagement, the 238th CBT meeting marks a transformative milestone in EPFO’s journey toward providing efficient, transparent, and globally benchmarked services to its 30 crore members.