EPFO to Auto-Settle Rs 5,200 Crore in Inactive PF Accounts via Aadhaar

Under the proposed mechanism, balances lying unclaimed in such accounts will be credited directly to subscribers' Aadhaar-linked bank accounts, removing the need for filing claims.

In the first phase, around 25 per cent of Aadhaar-verified inactive accounts are expected to be processed, enabling beneficiaries to receive pending funds seamlessly, according to reports.

The move is likely to cover about 8 lakh Aadhaar-verified inactive accounts, with an estimated total value of Rs 5,200 crore.

Among these, nearly 14,000 accounts have unclaimed balances of over Rs 5 lakh, while about 38,000 accounts hold between Rs 1 lakh and Rs 5 lakh. Another 41,000 accounts have amounts ranging from Rs 50,000 to Rs 1 lakh.

The Central Board of Trustees has already approved the automatic settlement of inactive accounts with balances of up to Rs 1,000, allowing funds to be transferred directly to registered bank accounts.

The EPFO was yet to issue an official statement on the reports.

An EPFO account is treated as inactive once it stops earning interest, typically after a member retires at 55 and makes no contributions for three consecutive years.

However, for those who are below 55, interest continues to accrue until they turn 58.

As of February 2026, EPFO had around 31 lakh inactive accounts with unclaimed deposits totalling Rs 10,181 crore.

Of these, close to 7 lakh accounts are over two decades old, while 18 lakh fall in the 10-20 year bracket. Around 13 lakh accounts are between 5 and 10 years old.

Earlier, EPFO cleared an interest rate of 8.25 per cent on employees' provident fund (EPF) deposits for 2025-26, retaining the same rate for the second year in a row, according to an official statement.

However, accounts that remain inactive for 36 months do not earn any further interest as they are considered dormant, it said.

- IANS