The Employees’ Provident Fund Organisation (EPFO) has introduced a number of significant changes to the EPF (Employees’ Provident Fund) scheme, which will come into effect from 2025. The changes will make the system more transparent, enhance benefits to members, and align the system with changing workforce patterns. If you are an EPF member, the following five significant changes are a must-know for you:
1. Universal Account Number (UAN) KYC Mandatory for All Transactions
From January 2025, EPFO has made it compulsory for all members to get their KYC (Know Your Customer) process completed in association with their UAN. Members who don’t follow KYC will not be able to transfer funds, withdraw money, or get updated interest messages. This is to avoid fraudulent claims and ensure quicker settlements.
2. Auto-Transfer of EPF Account on Job Change
Job hopping will no longer involve the physical shifting of EPF money. From 2025, the EPFO will automatically transfer your EPF account to the records of the new employer once your UAN is changed in the new firm’s database. Delays and fund breakages are eliminated, and fund continuity is ensured without member intervention.
3. New Pension Calculation Formula
A new formula for pension calculation will be implemented, taking into account both years of service and average monthly pay for a longer period. This new formula will give more stable and equitable pension, particularly to long-serving employees. Members are requested to view the EPFO website to get individual projections.
4. Increased Interest on Voluntary Contributions
To encourage retirement savings, EPFO will provide a marginally higher rate of interest on voluntary contributions over the compulsory 12%. This move is likely to help those who wish to increase their corpus at a faster rate and safeguard their life after retirement more effectively.
5. EPF Passbook Changes to Include Pension and Insurance Information
The EPF passbook will also show not just your provident fund contributions but also pension and Employees’ Deposit Linked Insurance (EDLI) information. The combined view will better enable members to comprehend the savings they’re building and enhance money planning.
Final Thoughts
These new regulations are a major leap towards a more member-centric and digitalized EPF environment. EPF members are requested to make their UAN details updated, undergo KYC compliance, and remain aware through the official EPFO website or app.
By remaining proactive, you can get the best out of your EPF benefits and obtain a smoother entry into financial security in post-retirement.
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