Why Millions Can’t Access Their EPFO Savings

In August 2022, Sagar, a 32-year-old marketing professional based in Bengaluru, logged into the Employees’ Provident Fund Organisation (EPFO) portal expecting to see his consolidated retirement savings. Instead, what greeted him was an empty passbook.

“One day I opened the passbook, and the entire amount of Rs 2,19,000 just vanished. There was absolutely no entry,” he told The Core.

The amount had been transferred a few months earlier from his previous two employers, one of which was an NGO with a provident fund (PF) trust structure — often categorised as exempt under EPFO’s pension provisions. The transaction had initially shown up correctly under his new employer’s account. Then, it disappeared.

“It’s been three years and I have not been able to track down this money,” Sagar said. “They would just dispose of the case… no proper next steps… no clarity where the amount is.”

Sagar’s is far from an isolated experience.

A System That Doesn’t Let You In

Sam Chandy, a Bengaluru-based techie, has spent the better part of the last 5 years trying to consolidate his multiple PF accounts. But his efforts keep colliding with what he calls a digital dead end.

“Half the time, you can’t even log into the website. The OTP is glitching… nothing loads,” he said.

Even when he manages to log in, Sam finds it difficult to view consolidated balances or get updated details.

For Shafeeque, a sales executive based in Chennai, the issue isn’t just about access, it's about giving up. When he tried to withdraw a portion of his PF savings to pay for his wedding, he hit a wall.

“I attempted to (withdraw)… but again with all the complications I opted not to. I went for other means,” he said.

Like many salaried professionals, Shafeeque had expected the process to be seamless — especially for life events such as marriage, which EPFO permits as a valid reason for partial withdrawal. Instead, he found himself locked out of the system altogether.

Broken Safety Net

The EPFO was born out of a constitutional promise. In 1950, the Indian Constitution laid out a directive for the State to provide citizens with social protections in cases of old age, unemployment, and financial vulnerability. This gave rise to the Employees’ Provident Funds Act, enacted in 1952, to ensure that salaried workers had access to their own long-term savings during emergencies, major life events, or retirement.

Over seven decades later, that vision is faltering. What was meant to be a financial safety net has, for many, become a maze of missing balances, login failures, opaque processes, and unresolved grievances.

“The social security mechanism that was created to make employees feel secure…people are scared of that very system now,” said Kunal Arora, founder of SKVC Consulting, a Delhi-based labour law compliance advisory that handles PF disputes for both public and private sector clients.

The Numbers Behind the Frustration

For many salaried Indians, EPFO’s technical issues aren’t just inconvenient, they are statistically inevitable.

Between FY2018–19 and FY2022–23, the overall rejection rate for EPFO claims rose from around 22% to nearly 28%, according to data reported by Financial Express. That means more than one in four claims were turned down in the early 2020s.

What’s more unexpected is the fact that the spike coincided with EPFO’s transition to a fully digital claim process and a tightening of KYC requirements.

To better understand this crisis, it’s important to break down the three primary categories of EPF claims:

• Final Settlement: This refers to the complete withdrawal of one’s provident fund (PF) corpus, typically after retirement, resignation, or two months of unemployment.

• Partial Withdrawals: These are advance claims filed for specific purposes—medical emergencies, marriage, education, or home purchase—without closing the PF account.

• Transfer Claims: When an employee moves from one job to another, their PF balance must be transferred to a new employer’s account through a formal process.

Of these, final settlement claims faced the steepest increase in rejections. According to The Indian Express, rejection rates for final PF withdrawals jumped from 18.2% in FY2018-19 to a staggering 34% by FY2022–23. In other words, more than one in three people who tried to withdraw their life savings at the end of employment had their claim denied — often without clarity on why.

“They (EPFO) will only tell you one reason. You fix it. You apply again. They will tell you the second reason… It's a never-ending cycle for many users,” said Kunal Kabra, founder of fintech advisory firm Kustodian.life, that helps people recover their unclaimed financial assets.

Transfer and partial withdrawal claims also faced significant rejection rates, though slightly lower. But even at a 25–28% overall rejection rate, the implication is sobering: millions of Indians each year are being denied access to their own savings.

System Failure

For all the frustration with EPFO’s technology, experts say part of the problem begins much earlier — with how little users actually understand the system.

“Most people don’t even know the basics of how EPFO works, i.e. how to check their passbook, what’s eligible for withdrawal, or what to do when switching jobs,” said Arora, founder of SKVC Consulting. “There’s a huge literacy gap around EPFO. It’s a black box for most salaried people until they need the money, and by then, it’s too late.”

But even those who know how to navigate the process often find themselves stuck in policy traps.

One of the biggest design flaws, Arora said, is how frequently EPFO tweaks its internal rules. “The processes that EPFO designs are not extremely pragmatic. They are, in a way, a lot of time, idealistic.”

These updates come roughly every six months, often from the top down, with little consideration for how they’ll play out at the ground level. The result: more confusion, more mismatches, more rejections.

This is further complicated by the Aadhaar-linkage paradox. Despite a Supreme Court ruling that Aadhaar is not mandatory for services like PF, EPFO went all-in on Aadhaar-based integration. The decision created fresh problems, especially when Aadhaar records didn’t match older PF data, leading to even more claim rejections for minor inconsistencies, according to Arora.

And then there’s the pre-2014 data blackhole. Members who joined EPFO before full digitisation kicked in face even deeper trouble. “If you are a part of this membership before 2014, you will always have a hard time,” Arora said. Old records were often uploaded with errors by employers and never reconciled. Today, EPFO holds the employee responsible, even when the mistake originated a decade ago.

Yet for all the institutional flaws, Arora doesn’t believe the burden lies with EPFO alone.

“I give equal responsibility to all three: the employer, EPFO, and employee,” he said. In a mass-scale system handling crores of active accounts and lakhs of crores in funds, some stringency is necessary to prevent fraud. But that doesn’t excuse the opaque processes, poor grievance redressal, and lack of proactive guidance that leave honest claimants in limbo.

“A system which is a mass-driven scheme… has to have stringent processes. Otherwise, the same money can go in the wrong hands,” Arora added.

Third Parties To The Rescue

The cracks in EPFO’s processes have become so deep that a new category of fintech intermediaries has emerged — companies that help users recover what should rightfully be theirs.

One of the more prominent names in this space is Kustodian.life (quoted earlier), a Bengaluru-based startup that specialises in recovering unclaimed or stuck financial assets, particularly EPFO funds.

The startup is part of a small but growing ecosystem of platforms including FinRight, a Mumbai-based fintech that assist users with EPFO withdrawals, claim tracking, and documentation. These platforms operate on a tiered pricing model, ranging from Rs 2,000 to Rs 25,000, or sometimes a percentage of the recovered amount.

Yet this model isn’t without controversy. The EPFO itself has issued advisories cautioning members against engaging third parties — especially unverified agents or cyber cafes — which might overcharge for services that EPFO offers for free. There’s also a risk of data theft, identity fraud, and phishing scams posed by imposters claiming to be “PF consultants.” Still, the demand is sizeable.

According to a Mint report, the informal “PF consulting” market in India is estimated to be worth around Rs 3,300 crore annually, assuming that just 20% of rejected claimants (roughly 3.2 lakh people) end up paying an average of Rs 10,000 each to get their cases resolved through intermediaries.

“If I’m getting Rs 2 lakh out by giving Rs 10,000, that’s still 95% of what I had no hope of seeing,” said Arvind Datta, founder of Marigold Wealth Advisors and a former banker. “It’s not unethical or illegal. The person is stuck, and they’re paying for a result.”Datta drew parallels with other financial recovery segments, such as the transfer of physical shares from the Investor Education and Protection Fund Authority (IEPF), where brokers regularly charge 15–20% commissions. He believes regulation, not prohibition, is the way forward.

“If you want to take third-party help, fine, but register agents with EPFO or a government body, just like mutual fund distributors,” he said. He also suggests a milestone-based fee model, where users pay a nominal 0.5–1% upfront and a larger success fee only if the money is recovered.

For Datta, the real ethical breach lies not in what these fintechs charge, but in the lack of transparency and accountability within the EPFO itself.

“Why do unscrupulous agents exist? Because our government systems are vastly opaque,” he said. “If your EPFO complaint isn’t resolved, where do you go? There is no next level of escalation.”

He argues that unless a formal grievance redressal or oversight body, like RBI for banks or IRDAI for insurers, is established, the dependence on agents and intermediaries will only grow.

In the end, the rise of third-party PF consultants — whether startups or local agents — is not the disease but the symptom. As long as the public system remains slow, opaque, and unaccountable, people will continue to seek workarounds. And as long as these intermediaries operate transparently and deliver results, many users will see them not as exploiters, but as enablers in a system that has failed to serve its own members.