Faster withdrawals, higher pensions, seamless UAN creation, and 8.25% returns
The Employees’ Provident Fund Organisation (EPFO) has introduced several new reforms in 2025 aimed at modernizing how retirement savings are managed. These reforms are designed to make processes faster, more transparent, and easier to access for salaried employees across India. From instant withdrawals to better pension payouts, these changes are expected to make a significant difference in how people plan and manage their retirement funds.
Here’s a detailed look at how these reforms will impact retirement savings.
Interest Rate Maintained at 8.25%
The EPFO has kept the interest rate on EPF deposits at 8.25% for the financial year 2024–25. This is the same as the previous year and is considered one of the highest returns among fixed-income investment options in India.
This move is particularly beneficial for long-term savers. With compound interest over many years, this rate helps build a large retirement fund. Compared to fixed deposits and other savings schemes, EPF remains an attractive option due to its stable and higher interest rate.
EPFO’s overall investment income for the year has crossed ₹1.07 lakh crore, and its total corpus has reached approximately ₹13 lakh crore. These figures show strong financial health and the ability to continue offering good returns.
Instant Withdrawals Using UPI and ATMs
One of the most exciting reforms is the introduction of instant claim settlements. Very soon, EPF members will be able to withdraw money using UPI or even from ATMs. This means that access to emergency funds will be quicker and easier than ever before.
In the past, EPF withdrawals used to take several days or even weeks. Now, with this change, claims will be processed in real-time, reducing delays and helping people manage urgent financial needs without stress.
Already, more than 2.16 crore claims have been processed in the last financial year, which is more than double the number from the previous year. This shows that the system is becoming more efficient.
Faster UAN Generation and KYC Automation
The Universal Account Number (UAN) system has been improved to make it easier for new employees to join the EPF system. Earlier, there were delays in getting a UAN because of issues like Aadhaar verification or employer approval. Now, UANs can be created in bulk, even without Aadhaar, which helps employers onboard staff quickly.
Also, a new feature allows face authentication using the UMANG mobile app. This allows users to verify their identity without needing to visit any office. Bank account details are also verified automatically, removing the need for employer signatures.
This digital automation reduces paperwork and errors, making the experience smoother for both employees and employers.
Simplified Transfer Process with New Form 13
Transferring EPF accounts from one employer to another used to be a slow and confusing process. With the introduction of a new and improved Form 13, this process has become much easier.
The new form clearly shows the tax-free and taxable parts of the fund, helping with better planning and tax filing. Transfers can now happen without the need for approval from either the old or new employer, saving time and effort.
This is especially helpful for employees who change jobs frequently and want to keep their EPF accounts active and unified.
Easier Claims Without Cheque Uploads or Employer Sign-Offs
Claiming money from the EPF account used to require uploading scanned cheques or passbooks and getting employers to verify them. These steps often caused delays or rejections.
Now, these requirements have been removed. If the bank account is verified digitally, the system processes the claim automatically. This gives members more control and independence.
Also, employers can now pay old dues using a demand draft, which simplifies the process of clearing past payments and updates employee records faster.
Centralised Pension Payment System (CPPS)
From January 2025, pensions are being paid through a centralized system linked to the National Payments Corporation of India (NPCI). This system allows pension money to be credited directly to any bank account, without needing to transfer pension papers (PPOs).
This change has made pension payments quicker and more reliable. It also makes submitting digital life certificates easier and avoids the need for physical visits by pensioners, especially the elderly.
Linking the pension account to the UAN ensures a unified and streamlined record for every pensioner.
Pension Hike Under EPS – Minimum ₹7,500 per Month
Another major reform is the increase in the minimum pension under the Employees’ Pension Scheme (EPS). Eligible retirees will now receive at least ₹7,500 per month, provided they had opted for higher pension contributions before 2014.
The new pension amounts are being disbursed starting June 2025, and backdated payments will continue until August. This increase is expected to benefit thousands of pensioners, helping them cope better with rising living costs.
The step signals the government’s commitment to improving pension adequacy and reducing financial stress for older citizens.
Increase in Subscriber Base
EPFO added over 14.58 lakh new members in March 2025 alone, indicating a healthy rise in formal employment and coverage. More people joining the EPF system means broader access to social security and retirement planning tools.
A larger subscriber base also makes the fund more sustainable and allows for better investment returns and higher interest payouts over time.
Impact on Retirement Planning
These reforms are reshaping how retirement savings work in India:
Higher Returns: With 8.25% interest, retirement savings grow faster compared to most other options.
Easy Access: UPI and ATM withdrawals help in emergencies.
Less Paperwork: Automation of KYC, bank verification, and transfers reduces delays.
Better Pensions: Higher EPS payouts ensure financial support after retirement.
Faster Processing: Real-time systems help users manage their funds more efficiently.
Final Thoughts
The EPFO’s new reforms show a strong shift toward digital services, convenience, and faster delivery. These changes aim to make the EPF scheme not just a savings tool but a more flexible and responsive system for future financial security.
As technology adoption increases and more people join the formal workforce, these reforms will likely play a major role in building a strong and secure retirement ecosystem for India’s working population.
