EPFO Approves New EPF, EPS and EDLI Schemes Under Social Security Code, Recommends 8.25% Interest

The 239th meeting of the Central Board of Trustees (CBT) of the Employees' Provident Fund Organisation (EPFO) concluded with a series of significant decisions aimed at strengthening social security coverage, improving governance standards and enhancing member services.

Foremost among them was the recommendation of an 8.25% annual rate of interest on EPF accumulations for the financial year 2025-26. The rate will be officially notified by the Government of India before being credited to members' accounts.

Interest Rate Maintained Amid Global Uncertainty

Despite volatility in global financial markets and geopolitical tensions, including the Israel US vs Iran conflict, the Board decided to keep the interest rate unchanged at 8.25%.

"Interest rate was kept steady at 8.25% despite uncertainties in financial markets and tense geopolitical situation and Israel US vs Iran war," Vineet Nahata, CBT member (EPFO) and employer's representative from the PHD Chamber of Commerce and Industry, said.

EPFO reported a deficit of ₹944 crore on the income front after factoring in provisional one month March interest and last year's surplus of ₹5,480 crore. According to Nahata, the organisation remains on firm financial footing.

"The deficit of 944 Cr on Income front , after inclusion of provisional one month March Interest and last year's surplus of Rs. 5480 Cr , left a healthy balance for next year as well . Next year we expect creation of Interest Stabilization Reserve to formalize the consistency and predictability of stable interest payout to subscribers," he stated.

EPFO has consistently delivered returns above 8% in recent years, supported by healthy earnings from ETFs and other investments. The Board noted that the decision reflects the strong credit profile of EPFO's portfolio and its capacity to provide stable returns to crores of subscribers.

Amnesty Scheme and Compliance Reforms

In a major compliance reform, the CBT approved a one time Amnesty Scheme for income tax recognised trusts that do not currently have an EPFO code. The scheme will provide a six month window to regularise compliance while safeguarding employees' interests.

"Launch of One time Amnesty Scheme for Income Tax Registered PF Trusts not having EPFO code within 6 months," Nahata said.

The scheme is expected to resolve over 100 active litigation cases and benefit thousands of trust members. It allows waiver of damages, interest and penalties in cases where statutory benefits have already been extended, subject to prescribed conditions.

The Board also approved a simplified Standard Operating Procedure on EPF exemption, consolidating multiple existing guidelines into a single digital framework. The move is aimed at reducing compliance burden, enhancing transparency and ensuring paperless processing of surrender and exemption cases.

Social Security Code Alignment and UK Pact

The CBT cleared the notification of new schemes under the Code on Social Security, 2020. The newly approved EPF Scheme 2026, EPS 2026 and EDLI Scheme 2026 will replace the existing frameworks, creating a legally robust base for administering provident fund, pension and insurance benefits.

The Board also took note of the signing of a Double Contributions Convention between India and the United Kingdom under the Comprehensive and Economic Trade Agreement.

"The Indo UK Double Contribution Convention to eliminate double social security contribution for employees on temporary short term (36 months) overaeas assignment," Nahata said.

The agreement is designed to prevent dual social security contributions for employees on short term overseas postings of up to 36 months, thereby reducing costs for both workers and employers.

Auto Settlement of Small Inoperative Accounts

To expedite liquidation of dormant accounts, the Board approved a pilot project for auto initiation of claim settlement in inoperative EPFO accounts with balances of ₹1,000 or less. Around 1.33 lakh accounts amounting to nearly ₹5.68 crore will be covered in the first phase. The funds will be credited directly to Aadhaar seeded and EPFO linked bank accounts without fresh claims or documentation.

If successful, the initiative will be expanded to accounts with higher balances, strengthening member centric reforms and reducing long pending balances.

Strong Operational Performance in FY 2024-25

During FY 2024-25, EPFO recorded total contributions of ₹3,35,628.81 crore. It brought 2,86,894 new establishments under coverage and enrolled 1,22,89,244 new members. The organisation served 81,48,490 pensioners and settled 6,01,59,608 claims, including 69,983 EDLI claims.

In addition, 17,33,046 grievances were redressed and 39,74,501 calls attended. Several reforms were rolled out, including pan India implementation of the Centralised Pension Payment System and Digital Life Certificate submission through Facial Authentication Technology. Amendments to the Employees' Pension Scheme allowed withdrawal benefits even after one month of contribution, while EDLI benefits were enhanced with assurance ranging from ₹2.5 lakh to ₹7 lakh for eligible members.

The Board also approved the Annual Report for 2024-25 for tabling in Parliament, along with audited annual accounts for FY 2023-24 and revised and budget estimates for subsequent years.

Further approvals included a structured SOP for corporate actions such as buybacks and call or put options, a strengthened framework for investment in Equity ETFs and Liquid Mutual Funds, and the appointment of the Institute of Banking Personnel Selection as the agency for conducting recruitment and promotion examinations.

With assets exceeding ₹28.34 lakh crore as of March 2025, EPFO's latest decisions aim to balance financial prudence with expanded social security coverage, while reinforcing governance, transparency and member service delivery.