Many people change jobs and forget to withdraw money from their old PF accounts.
In some cases, even family members may have PF accounts that have been inactive for years.
Now, there is good news for such people.
The Employees’ Provident Fund Organisation (EPFO) has started a new pilot project to help clear money stuck in inactive PF accounts.
Under this initiative, funds from inactive accounts with a balance of ₹1,000 or less will be transferred directly to the subscriber’s bank account without any application.
However, this will only work if the PF account has completed KYC and is linked with Unique Identification Authority of India Aadhaar and the user’s bank account.
Contents
Pilot Project Approved by EPFO Board
The auto-settlement process was approved during the 239th meeting of the Central Board of Trustees of the Employees’ Provident Fund Organisation held on March 2, 2026.
In the first phase, around 1.33 lakh inactive accounts have been selected.
These accounts together hold about ₹5.68 crore.
If this pilot project is successful, EPFO may increase the limit and include accounts with balances higher than ₹1,000 in the future.
Currently, EPFO manages a huge fund of about ₹28.34 lakh crore and has around 7.83 crore active members.
What Is an Inactive PF Account?
A PF account becomes inactive if a person retires at the age of 55 and no new contributions are made to the account for the next three years.
Once the account becomes inactive, it stops earning interest.
However, if someone leaves their job before the age of 55, the account continues to earn interest until the person turns 58, even if no new deposits are made during that time.
Huge Amount Stuck in Inactive PF Accounts
According to data as of March 31, 2025, India has about 31.83 lakh inactive PF accounts.
A total of around ₹10,181 crore is stuck in these accounts.
Out of these:
Around 12.90 lakh accounts have been inactive for 5 to 10 years, holding deposits worth ₹3,402.25 crore.
About 6.93 lakh accounts have remained inactive for more than 20 years, with deposits of ₹1,018.20 crore.
Nearly 4.42 lakh accounts have been inactive for 3 to 5 years, containing ₹2,336.32 crore.
Most inactive accounts have small balances. Around 29.43 lakh accounts hold less than ₹50,000.
On the other hand, only about 13,000 accounts have more than ₹10 lakh, but even these large accounts together hold around ₹4,553 crore.
No Paperwork Needed to Get the Money
The biggest advantage of this new system is that subscribers may not need to complete any paperwork.
If your old PF account is linked to Aadhaar and your bank account, you will not have to fill out a claim form, visit the **Employees’ Provident Fund Organisation office, or contact your previous employer.
EPFO will identify the linked bank account from its records and transfer the money automatically.
At present, this system is being tested in 10 regional offices.