EPFO Plans Direct Transfer of Funds from Dormant PF Accounts

EPFO to Automate Recovery of Unclaimed Funds, Targeting Rs 5,200 Crore​

New Delhi – The Employees’ Provident Fund Organisation (EPFO) is preparing to significantly increase efforts to recover unclaimed funds held in inactive accounts. The organization plans to implement an automated settlement system, aiming to directly credit balances to subscribers’ Aadhaar-linked bank accounts, eliminating the need for traditional claim filing processes.

Automated Settlement Mechanism​

The proposed system will initially process approximately 25% of Aadhaar-verified inactive accounts, representing an estimated 8 lakh accounts. This initiative is projected to recover a total of Rs 5,200 crore in unclaimed funds.

Breakdown of Unclaimed Balances​

Analysis of the inactive accounts reveals a distribution of balances:

• Nearly 14,000 accounts hold unclaimed balances exceeding Rs 5 lakh.
• Around 38,000 accounts have balances between Rs 1 lakh and Rs 5 lakh.
• Another 41,000 accounts hold amounts ranging from Rs 50,000 to Rs 1 lakh.

Central Board Approval​

The Central Board of Trustees has already approved the automatic settlement of inactive accounts with balances up to Rs 1,000, facilitating direct transfers to registered bank accounts.

Current Status of Inactive Accounts​

As of February 2026, the EPFO reported approximately 31 lakh inactive accounts with unclaimed deposits totaling Rs 10,181 crore. The breakdown of these accounts by age is as follows:

• Close to 7 lakh accounts are over two decades old.
• 18 lakh accounts fall within the 10–20 year bracket.
• Approximately 13 lakh accounts are between 5 and 10 years old.

An EPFO account is considered inactive once it ceases to earn interest, typically following a member’s retirement at 55 and a period of three consecutive years without contributions. Interest continues to accrue for members below 55 until they reach 58. The EPFO previously announced an interest rate of 8.25% on employees’ provident fund (EPF) deposits for 2025-26, retaining the same rate for the second year in a row. Accounts inactive for 36 months do not earn further interest.