By Sumita Dawra
The Employees’ Provident Fund Organisation (EPFO) is a premier social security organisation in the country, with over 300 million accounts, and a live membership of more than 74 million formal sector workers. In recent times, to ensure ease of living, the EPFO has undertaken significant reforms aimed at improving pension services, streamlining claim processing for provident fund (PF), and enhancing tinformation technology (IT) systems. These reforms have led to improvements in service delivery for millions of EPF members and pensioners, with more improvements to follow in the near future.
Pension reforms: A landmark change was the launch of the Centralised Pension Processing System in December 2024. This system ensures that all 78 lakh EPFO pensioners across India can receive their pensions through any bank branch rather than being restricted to specific ones, bringing greater flexibility and convenience to pensioners.
Auto-settlement of PF claims: The labour ministry reintroduced and expanded the auto-settlement of PF claims last year, increasing the eligibility limit from Rs 50,000 to Rs 1 lakh. This is particularly significant as it enables faster processing of claims without manual intervention.
Additionally, the auto-settlement categories have been expanded beyond sickness-related claims to include education, marriage, and housing. Given that nearly 60% of the EPFO’s total advance claims are covered under auto-settlement, this reform has drastically increased efficiency, reducing delays and simplifying access to funds for members.
IT and database reforms: To improve the efficiency of EPFO services, a major IT reform has been undertaken through the Centralised IT Enabled System 2.01. The integration of new hardware through RailTel has enhanced processing speeds. Currently, the EPFO is working on the smooth migration of data to a single consolidated database and security audits, with full implementation expected by March 31. Once completed, this system is expected to reduce the average claim processing time to three-four days; eliminating the need for physical transfer of PF records across different zones and making transfers seamless.
Simplification of processes: A significant push has been made to simplify EPFO processes, particularly for transfer cases, profile updates, and documentation requirements. Key process improvements include simplified PF transfers (members no longer need to route their transfer claims through employers); easy profile updates (members whose Universal Account Number is Aadhaar-validated can now update key details without submitting any documents); and the removal of unnecessary document uploads, thereby reducing paperwork.
Simplification of claim processing: The process of making a claim has had certain validations embedded. Without fulfilling them, the claims for auto-settlement gets rejected. Realising the importance of the process since it pertains to withdrawal of funds for urgent reasons, the ministry of labour and employment constituted a committee of financial experts in January. The committee’s report is being implemented in the EPFO, with the first step being simplifying the validations and bringing those pertaining to eligibility upfront in the application process itself.
Further, alternative payment methods are being examined so that EPFO claims can be brought onto digital platforms such as the Unified Payments Interface.
Other key reform areas include the processing of applications on pension on higher wages, as over 17 lakh long-pending applications are being rapidly processed with a disposal target of end of March. Additionally, alternative dispute resolution mechanisms are being examined to reduce litigation and delays by adopting faster and amicable ways to settle disputes. Lastly, grievance redress has been improved through two key directives issued in January, simplifying the online member profile update process as well as the PF transfer process.
These reforms have had a transformational impact on the EPFO’s performance, as seen from the record-breaking claim settlements. The EPFO crossed the 5-crore mark for claim settlement for the first time in its history. In FY25, it processed 5.08 crore claims worth Rs 2.05 lakh crore, surpassing 4.45 crore claims worth Rs 1.82 lakh crore in FY24.
Besides, faster processing has been enabled on account of auto-settlement claims, which are now processed within three days of submission. Auto-settlement numbers have more than doubled, from 89.52 lakh in FY24 to 1.87 crore in the current financial year. Further, there is a simplified transfer process for PF and only 8% of transfer claims now require member and employer attestation — 48% of transfer claims are submitted directly by members, while 44% are automatically processed.
An efficient profile updating process has been put in place and 97.18% of profile corrections are now self-approved by members. Only 1% require employer approval, and just 0.4% need office intervention.
The recent EPFO reforms mark a new era of efficiency, transparency, and accessibility. From pension modernisation and faster PF claims to IT-driven improvements and streamlined processes, these changes have significantly improved the experience for millions of members.
As the EPFO continues to implement these initiatives, the focus remains on simplifying operations, reducing delays, and leveraging technology to provide seamless, hassle-free services to its stakeholders. The upcoming months will be crucial in ensuring stabilising these reforms, paving the way for a more robust and member-centric EPFO, as we deliver on the vision of Viksit Bharat through ease of living for our citizens.
The writer is secretary, ministry of labour and employment.
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