Under the pilot project, the unclaimed balance amounts will be directly credited to members’ Aadhaar-seeded and EPFO-linked bank accounts without requiring fresh claims or documentation. Photo: FreepikThe Employees’ Provident Fund Organisation (EPFO) has a total of 31.83 lakh inoperative accounts, of which around 41% have been inoperative for over 5-10 years while about 22% are lying idle for over 20 years. In its latest (239th) meeting on Monday (March 2), EPFO’s Central Board of Trustees decided to address this issue by giving a nod for auto-settlement of such inoperative accounts, initially for those with unclaimed balance of Rs 1,000 or less, to their registered bank accounts.What are inoperative accounts under EPFO, and how does the retirement fund body plan to process claim auto-settlement for them? We explain.Inoperative accounts are those EPF accounts in which no interest is credited after a specified period. Mainly belonging to EPFO members who have retired after the age of 55 years, an EPF account is treated as inoperative if no contribution is received for a continuous period of three years after the member attains 55 years of age or from the date of retirement, whichever is later. If the member is below the age of 55 and there has been no contribution, such EPF accounts continue to earn interest till the age of 58.More in Explained | Withdrawals are draining employees’ retirement corpus: What EPFO numbers revealAs per the data shared in the Board meeting, there are 31.83 lakh such inoperative accounts amounting to Rs 10,181 crore as on March 31, 2025. This excludes international workers.What did the Board decide?The Board approved a pilot project for auto-initiation of claim settlement in the inoperative EPFO accounts with unclaimed balances of Rs 1,000 or less. Over 1.33 lakh accounts with nearly Rs 5.68 crore will be covered in this phase, and based on the pilot’s results, it is then planned to be extended to accounts with balances above Rs 1,000.Under the pilot project, the amounts will be directly credited to members’ Aadhaar-seeded and EPFO-linked bank accounts without requiring fresh claims or documentation. This is expected to simplify the process of claims settlement for such inoperative accounts, as members need not undertake any action on their side to receive their dues.What is the status of inoperative accounts? To put things in perspective, EPFO has a total of 27.05 lakh establishments under its purview with 34.63 crore members, out of which there are 7.98 lakh contributing establishments and 7.83 crore active contributing members. It has a consolidated corpus of over Rs 28.34 lakh crore.Story continues below this adOf the total 31.83 lakh inoperative accounts, 12.90 lakh (40.52%) are inoperative for over 5-10 years with an amount of Rs 3,402.25 crore. Some 6.93 lakh accounts (21.75%) with an amount of Rs 1,018.20 crore are lying idle for over 20 years, whereas 4.42 lakh accounts (18.12%) having Rs 2,336.32 crore are inoperative for over 3-5 years.In terms of amount, 29.43 lakh inoperative accounts having Rs 2,121 crore have balances of up to Rs 50,000 — reflecting the scale of inactivity in low-value accounts. However, in value terms, just 13,000 inoperative accounts carrying balances above Rs 10 lakh have a total of Rs 4553.57 crore of locked-in amount.EPFO has carried out a KYC analysis of such inoperative accounts, as the first pilot phase will see the initiation of auto-settlement for the KYC and Aadhaar-seeded accounts only. As on February 21 this year, under the category of accounts with balance up to Rs 1,000, there are 1.33 lakh Aadhaar-verified inoperative accounts holding a total balance of Rs 5.68 Crore and 0.23 lakh Aadhaar-verified and bank-verified inoperative accounts holding a total balance of Rs 1.09 crore.A pilot study is already underway in 10 regional offices, under which random samples from the category of “up to Rs 50,000” have been selected for validation of member PF balance data by field offices.Story continues below this adFor inoperative accounts with balance over Rs 1,001 and above, there are 6.8 lakh Aadhaar-verified accounts holding a total balance of Rs 5,212.42 crore and 2.31 lakh Aadhaar and bank-verified accounts holding a balance of Rs 3,275.35 crore.Aanchal Magazine is a Deputy Associate Editor with The Indian Express, serving as a leading voice on the macroeconomy and fiscal policy. With 15 years of newsroom experience, she is recognized for her ability to decode complex economic data and government policy for a wider audience. Expertise & Focus Areas: Magazine’s reporting is rooted in "fiscal arithmetic" and economic science. Her work provides critical insights into the financial health of the nation, focusing on: Macroeconomic Policy: Detailed tracking of GDP growth, inflation trends, and central bank policy actions. Fiscal Metrics: Analysis of taxation, revenue collection, and government spending. Labour & Society: Reporting on labour trends and the intersection of economic policy with employment. Her expertise lies in interpreting high-frequency economic indicators to explain the broader trajectory of the Indian economy. Personal Interests: Beyond the world of finance and statistics, Aanchal maintains a deep personal interest in the history of her homeland, Kashmir. In her spare time, she reads extensively about the region's culture and traditions and works to map the complex journeys of displacement associated with it. Find all stories by Aanchal Magazine here ... Read More © The Indian Express Pvt LtdTags:Express Explained