EPFO 3.0: Before withdrawing 75% of PF from ATM, know the big loss, pension will be directly affected.

EPFO: Under the proposed EPFO ​​3.0 system, there will be major changes in the Employee Provident Fund Organization (EPFO), including a completely paperless process and ATM-like withdrawals for EPF accounts. Although this move is a big step towards modernizing the EPFO ​​system, many old employees are worried that withdrawing large amounts may affect their pension benefits under the Employee Pension Scheme (EPS).

EPF (Employee Provident Fund) and EPS (Employee Pension Scheme) are government-supported retirement savings platforms in India, both managed by EPFO. However, the government treats EPF savings and EPS pension contribution separately.

Will withdrawing EPF from ATM affect pension?

ATM withdrawal facility will be applicable only on EPF balance, which includes the contribution made by the employee and employer to the Provident Fund (PF). However, members will be allowed to withdraw only up to 75% of the EPF balance. Pensioners cannot withdraw their EPS pension amount through this facility.

What did the Labor Ministry clarify?

A government notification in this regard says, “These changes will not have any impact on the pension entitlement at the age of 58 years. Any member can withdraw the amount deposited in the pension account any time during these 10 years, before completing 10 years of service. However, to qualify for pension on retirement, the member will have to complete at least 10 years of EPS membership.”

This notification means that if a 50 year old employee withdraws a large part of his EPF balance, his EPS service record will not be reset. As long as they complete at least 10 years of eligible service, they remain entitled to pension benefits.

What is EPFO ​​3.0?

EPFO 3.0 is a major digital upgrade initiative of EPFO ​​that will help subscribers to withdraw or transfer their PF money instantly in a paperless manner.

The new system will eliminate processing delays by allowing subscribers to directly access and transfer their provident fund savings through UPI and UPI-enabled ATMs.

EPFO 3.0 launch date

Labor Minister Mansukh Mandaviya had said earlier this month that the government has completed testing of this facility and it is expected that this service will start soon. However, he did not give any firm date.

Mandaviya said, “We have completed testing of the facility where members can withdraw EPF (Employee Provident Fund) using the UPI payment gateway. The amount withdrawn will be transferred directly to the member’s bank account.”

According to official data, the government added more than 1.29 crore workers to the payroll in 2024-25. Meanwhile, the unemployment rate fell from 6% in 2017-18 to 3.2% in 2023-24.

EPFO currently manages a fund of about ₹28 lakh crore and is trusted by crores of members because of its robust systems, security and high returns, which in many cases are tax-free.

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