New EPFO Rule: PF and Pension Claims Must Be Settled in 20 Days, Here’s How To Act on Delays
The Employees' Provident Fund Organisation (EPFO) has overhauled its claim settlement process, mandating that provident fund withdrawals be processed within three days and pension and insurance claims be settled within 20 days.
The Employees' Provident Fund Organisation (EPFO) has overhauled its claim settlement process, mandating that provident fund withdrawals be processed within three days and pension and insurance claims be settled within 20 days. The reform is part of a broader transition from the old EPF Act to the new Code on Social Security, with the Ministry of Labour and Employment notifying three new schemes on June 29, 2026.
What The New Rules Say
Under the newly notified Employees' Provident Funds (EPF) Scheme, 2026, Employees' Pension Scheme (EPS), 2026, and Employees' Deposit-Linked Insurance (EDLI) Scheme, 2026, PF withdrawal claims that are complete in all respects and do not require additional verification must be settled within three days. Pension and EDLI claims, meanwhile, carry an outer limit of 20 days for settlement. EPFO Delays UPI-Linked Provident Fund Transactions to August: Here's Why.
Claims involving discrepancies or incomplete documentation may continue to take longer to process, as they require additional verification before settlement.
Penalty For Delayed Claims
To improve accountability, the new framework introduces a fixed 12 percent per annum penal interest on the benefit amount if a claim complete in all respects is not settled within the prescribed timeline without justifiable cause. This penal interest is to be deducted directly from the salary of the official responsible for the delay, such as the EPFO Commissioner overseeing the case. EPF 8.25% Interest Not Credited Yet? 3 Easy Ways To Check Your PF Balance.
This marks a departure from the earlier system, under which officials were required to pay only the declared annual EPF interest rate on delayed claims. The fixed 12 percent penalty is designed to hold individual officials more directly accountable for settlement delays.
What Subscribers Can Do If Their Claim Is Delayed
Subscribers whose claims remain unsettled beyond the mandated 20-day window, without any communicated justification, are entitled to raise the matter through EPFO's grievance redressal channels. Since the new rules explicitly tie penal interest to official accountability, a documented delay beyond the stipulated period strengthens a subscriber's case when escalating the issue.
Employees and employers will continue to contribute 12 percent of the employee's basic wages towards EPFO's social security schemes, with 8.33 percent of the employer's share diverted to the pension scheme and the Central Government contributing a further 1.16 percent towards it.
Why EPFO Introduced These Changes
EPFO has for years grappled with operational issues related to delays in claim settlement, prompting the push toward stricter timelines and improved digitalisation. The reforms are aimed at making PF withdrawals faster through greater automation and reduced manual intervention, while also requiring exempted establishments and EPF trusts regulated by EPFO to offer online facilities for filing claims and other applications.
Officials say the changes are intended to strengthen digital compliance across both employers and EPFO, allowing subscribers to access services online without unnecessary delays.
(The above story first appeared on LatestLY on Jul 27, 2026 02:43 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
