The Ministry of Labour and Employment has approved a pilot project that will make it easier for provident fund subscribers to access money lying idle in small, inactive accounts. Under this initiative, balances of Rs 1,000 or less in inoperative Employees’ Provident Fund Organisation (EPFO) accounts will be automatically refunded to the subscriber’s linked bank account. No application or paperwork will be required.
An EPFO account is considered inoperative if there has been no contribution or transaction for three years. Official data shows there are 31.86 lakh such accounts, holding deposits worth Rs 10,903 crore. Within this, about 7.11 lakh accounts have balances of Rs1,000 or less, together amounting to Rs 30.52 crore. These accounts will be the first to benefit from the automatic refund system.
Accounts already linked with Aadhaar will receive refunds immediately, while others will be processed in phases. If the pilot proves successful, the government may extend the mechanism to cover the remaining 25 lakh inoperative accounts.
Inoperative accounts can arise for several reasons: employees changing jobs without updating details, outdated or incorrect account information, employers not filing claims, or even the death of an employee without nominees claiming the funds. Some accounts have been dormant for over 20 years.
By directly transferring small balances, the government aims to reduce paperwork, speed up settlements, and ensure workers can access their savings more easily. This reform is expected to benefit millions of employees by unlocking funds that would otherwise remain unclaimed.
For workers, the move means quicker access to their money, less hassle with forms, and greater confidence that their savings are not lost in the system.
1 Comment
Excellent proposal proposed by the Central government