There is good news for employees, as the Employees’ Provident Fund Organisation (EPFO) is planning a new system that will make it easier to withdraw money stuck in inactive PF accounts.
This new auto-settlement system could help release around ₹5,200 crore.
What Is the New Auto-Settlement Plan?
The EPFO is developing this system especially for accounts that have had no transactions for a long time. In the first phase, it will cover around 8.1 lakh Aadhaar-linked accounts.
The main aim is to send the money directly to users’ bank accounts without requiring them to submit a claim.
Starting With Small Balances
The system will first focus on accounts that have ₹1,000 or less. If you have a small amount left in an old EPF account, it can be automatically transferred to your bank account under this plan.
Status of Inactive Accounts
As of February 2026, about 31.8 lakh EPF accounts in India are inactive, with over ₹10,000 crore stuck in them.
Around 14,000 accounts have more than ₹5 lakh
About 38,000 accounts hold between ₹1 lakh and ₹5 lakh
Nearly 41,000 accounts have ₹50,000 to ₹1 lakh
These numbers show that a large amount of money is lying unused.
When Does an EPF Account Become Inactive?
An EPF account is considered inactive if there are no contributions for three years. Interest continues to be added until the account holder turns 55, but stops after that age.
Who Will Benefit First?
Priority will be given to employees who joined after October 2017. Those who have already completed Aadhaar linking and KYC will benefit first from this system.
Why This Step Matters
This move will help people recover their stuck money more easily and also improve transparency. Employees will no longer need to apply again to access funds from old accounts.
What You Should Do
If you have an old PF account, make sure to update it and link it with Aadhaar. This will help ensure that your money is transferred to your bank account automatically once the system is implemented.
