The Employees’ Provident Fund Organisation (EPFO)’s revised pension withdrawal rules—requiring a 36-month wait—have triggered widespread criticism from workers and unions across India. While the EPFO claims the changes are aimed at ensuring long-term financial discipline and sustainability, many see them as restrictive and unfair, especially for those facing financial hardship or job loss.
What the New Rule Says
Under the updated guidelines effective from October 13, 2025, EPFO members can now withdraw their pension benefits only after 36 months of continuous unemployment. This marks a significant shift from earlier provisions, where pension withdrawals were allowed after shorter durations or under more flexible conditions.
Why It’s Causing Backlash
The 36-month waiting period has drawn sharp reactions for several reasons:
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Delayed access to funds: Workers who lose jobs or retire early must wait three years to access their pension, even if they urgently need financial support.
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No exceptions for hardship: Critics argue that the rule lacks provisions for medical emergencies, layoffs, or informal sector transitions.
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Perceived erosion of rights: Many employees feel the new rule undermines their right to access savings they contributed over years of service.
Labour unions and employee advocacy groups have labeled the move as “punitive” and “insensitive,” especially in a post-pandemic economy where job security remains fragile.
EPFO’s Justification
EPFO officials, including Labour Minister Mansukh Mandaviya, have defended the rule as part of the broader EPFO 3.0 reform, which aims to modernize pension systems, promote digital access, and ensure long-term viability of the Employees’ Pension Scheme (EPS).
The organization has also introduced:
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Auto-claim settlements
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Instant PF withdrawals via ATMs and UPI
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Mandatory 25% lock-in of EPF balance to preserve retirement corpus
These reforms are designed to balance short-term liquidity with long-term financial security.
Public Response and Government Clarification
Following the backlash, the government issued clarifications stating that the new rules are intended to encourage continued pension eligibility and prevent premature depletion of retirement funds. Officials emphasized that the reforms would benefit members in the long run by ensuring a stable pension income.
However, many remain unconvinced, calling for a rollback or revision of the 36-month clause to accommodate genuine hardship cases.
The Central Board of Trustees is expected to review feedback and may consider amendments or exceptions in future meetings. Meanwhile, employee groups are mobilizing to demand more inclusive and flexible pension access policies.
