- Interest rate for FY 2025–26 retained at 8.25%; proposal to be sent for Finance Ministry ratification
- New EPF, EPS & EDLI Schemes aligned with Code on Social Security, 2020 approved
- Auto-settlement pilot for inoperative accounts with ₹1,000 or less to benefit 1.33 lakh members
- Amnesty Scheme cleared to resolve disputes in exempted establishments, protect workers’ interests
- Simplified digital SOPs to boost transparency, ease of doing business and compliance
- Massive operational scale: ₹3.35 lakh crore contributions, over 1.22 crore new members in FY25
NE ECONOMIC BUREAU
NEW DELHI, MAR 2
In a significant move impacting over seven crore subscribers, the Employees’ Provident Fund Organisation (EPFO) has retained the Employees’ Provident Fund (EPF) interest rate at 8.25% for FY 2025–26, while approving sweeping structural reforms aligned with the Code on Social Security, 2020.
The decisions were taken at the 239th meeting of the Central Board of Trustees (CBT) chaired by Union Labour & Employment Minister Mansukh Mandaviya in New Delhi.
8.25% EPF Interest Rate for FY26
After detailed deliberations, the CBT recommended an 8.25% annual rate of interest to be credited to EPF accounts for 2025–26. The proposal will now be sent to the Ministry of Finance for concurrence, following which it will be officially notified and credited to subscribers’ accounts.
Despite global uncertainties, EPFO has maintained strong financial discipline. The decision ensures stable and competitive returns without straining the interest account, reinforcing retirement security for crores of workers.
EPFO has declared an interest rate above 8% for several consecutive years, supported by robust returns from ETFs and other investments. The move reflects the strong credit profile of EPFO’s investment portfolio and its sustained ability to deliver prudent and attractive returns compared to similar long-term investment avenues.
Labour Codes Alignment: New EPF, EPS & EDLI Schemes
In a major structural reform, the CBT approved notification of new schemes aligned with the Code on Social Security, 2020. The EPF Scheme, 2026, EPS, 2026, and EDLI Scheme, 2026 will replace the existing frameworks, creating a legally robust foundation for provident fund, pension and insurance administration.
The move ensures a seamless transition to the labour codes regime and modernizes social security governance in India.
Auto-Settlement of Inoperative Accounts
In a member-centric reform, the Board approved a pilot for auto-initiation of claim settlement in inoperative EPFO accounts with unclaimed balances of ₹1,000 or less.
Around 1.33 lakh accounts, amounting to nearly ₹5.68 crore, will be covered in the first phase. Funds will be credited directly to Aadhaar-seeded, EPFO-linked bank accounts without requiring fresh claims or documentation.
An EPF account becomes inoperative if no contribution is received for three years after a member turns 55 or retires, whichever is later. Based on the pilot’s success, the facility will be extended to accounts with higher balances.
Amnesty Scheme for Exempted Establishments
To resolve compliance disputes, the CBT approved a one-time Amnesty Scheme for exempted establishments.
The scheme addresses income tax–recognized trusts not yet covered under the EPF & MP Act, 1952, factoring in provisions of the Finance Act, 2026. Establishments will get a six-month window to regularize compliance, with waiver of damages, interest and penalties where benefits equal to or better than statutory norms have been provided.
The move is expected to resolve over 100 active litigations and benefit thousands of workers.
Simplified SOPs, Digital Governance Push
The Board approved a new simplified SOP on EPF Exemption, consolidating four existing SOPs and the Exemption Manual into a single digital framework.
The technology-driven system provides end-to-end digital processing for surrender and transfer of past accumulations, risk-based online audits, and paperless governance — significantly enhancing transparency, efficiency and ease of doing business.
Additional SOPs were cleared for corporate actions, Equity ETF investments, and deployment in Liquid Mutual Funds, strengthening governance over EPFO’s consolidated corpus of over ₹28.34 lakh crore as of March 2025.
Strong Operational Performance in FY25
The CBT also approved EPFO’s Annual Report for 2024–25 for tabling in Parliament.
Key highlights:
- ₹3,35,628.81 crore in total contributions
- 2,86,894 new establishments brought under coverage
- 1,22,89,244 new members enrolled
- 6,01,59,608 claims settled
- 81,48,490 pensioners served
- 17,33,046 grievances redressed
Major reforms during FY25 included pan-India rollout of the Centralised Pension Payment System (CPPS), Digital Life Certificate submission via Facial Authentication Technology, uniform penal damages at 1% per month, and enhanced EDLI assurance benefits ranging from ₹2.5 lakh to ₹7 lakh.
The Board also approved EPFO’s revised budget estimates for 2025–26, budget estimates for 2026–27, audited annual accounts for 2023–24, and empanelment of IBPS for transparent recruitment exams.
With the 8.25% interest rate retained and labour codes-aligned reforms cleared, EPFO has signalled both financial stability and structural modernization — reinforcing its commitment to safeguarding members’ long-term retirement security.
