In a major relief for lakhs of employees, the Employees’ Provident Fund Organisation (EPFO) is reportedly planning to auto-settle around Rs 5,200 crore lying in inactive provident fund (PF) accounts, aiming to simplify access to long-unclaimed savings.
Auto-settlement system in the works
According to reports, EPFO is developing an automated settlement mechanism that will allow unclaimed funds in inactive accounts to be directly transferred to subscribers’ Aadhaar-linked bank accounts. This move is expected to eliminate the need for filing withdrawal claims, making the process faster and hassle-free.
The initiative is part of EPFO’s broader efforts to modernise its systems and ensure that members can easily access their savings without procedural delays.
Rs 5,200 crore across 8 lakh accounts
In the first phase, the system is expected to cover nearly 8 lakh Aadhaar-verified inactive accounts, with an estimated total value of around Rs 5,200 crore.
Data suggests that a significant portion of these accounts holds substantial balances:
- Around 14,000 accounts have over Rs 5 lakh each
- Nearly 38,000 accounts contain Rs 1–5 lakh
- About 41,000 accounts have Rs 50,000–1 lakh
This highlights the scale of unclaimed savings currently lying idle in the system.
Pilot phase already approved
The EPFO’s Central Board of Trustees has already approved the auto-settlement of inactive accounts with balances up to Rs 1,000. These smaller accounts will be processed first, with funds credited directly to registered bank accounts.
Based on the success of this pilot phase, the facility is expected to be expanded to cover accounts with higher balances in a phased manner.
What is an inactive PF account?
An EPFO account is classified as inactive when it stops receiving contributions for a prolonged period. Typically, this happens when an employee retires after the age of 55 and does not make contributions for three consecutive years.
Such accounts also stop earning interest after 36 months of inactivity, making it crucial for account holders to claim or transfer their funds in time.
However, for members below 55 years, interest continues to accrue until they reach 58 years of age.
Huge unclaimed deposits remain
As of February 2026, EPFO had around 31 lakh inactive accounts with unclaimed deposits totalling over Rs 10,000 crore.
A large number of these accounts are several years old:
- Nearly 7 lakh accounts are over 20 years old
- Around 18 lakh fall in the 10–20 year range
- About 13 lakh are between 5–10 years old
The new initiative is expected to significantly reduce this backlog.
Step towards digital efficiency
The proposed system aligns with the government’s push for digital governance and direct benefit transfers. By automating the settlement process, EPFO aims to improve transparency, reduce paperwork, and ensure that rightful beneficiaries receive their funds without delays.
While an official announcement is still awaited, the move is likely to benefit lakhs of subscribers and bring long-pending PF balances back into circulation.