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Informist, Monday, Mar. 2, 2026

 

NEW DELHI – The Central Board of Trustees of the Employees' Provident Fund Organisation on Monday approved a comprehensive standard operating procedure aimed at strengthening fund management across EPFO schemes, the labour and employment ministry said in a release. The reform envisages the consolidation of funds, the adoption of an annual Systematic Investment Plan approach, defined operational timelines, and the provision of an overdraft facility. 

 

The standard operating procedure introduces a structured framework for equity Exchange Traded Fund investments with clearly defined entry and exit protocols, exposure limits, compliance controls and enhanced oversight through the Investment Monitoring Cell, the release said. It also strengthens liquidity management through regulated deployment in liquid mutual funds with defined holding norms and continuous monitoring. "These reforms aim to optimise returns within prudent risk parameters, strengthen liquidity planning and safeguard the long-term interests of crores of EPF members," the ministry said.

 

The board also approved a comprehensive standard operating procedure to institutionalise a transparent and time-bound framework that provides structured decision-making to safeguard against reinvestment and interest rate risks, with a clear audit trail. This will enable prompt investment decisions in line with prevailing market conditions, thereby minimising risks arising from delays, while ensuring that all actions are taken strictly in accordance with laid down policy and governance norms to protect members' long-term interests, the ministry said.

 

At its 239th meeting, the Central Board of Trustees also recommended retaining the interest rate for its subscribers at 8.25% in 2025-26 (Apr-Mar). "Despite global uncertainties, EPFO has maintained strong financial discipline, ensuring stable and competitive returns without straining the interest account," the release said. "The decision benefits crores of workers by strengthening their retirement security, while reaffirming EPFO's commitment to safeguarding contributions and delivering prudent, sustainable, and attractive returns compared to other similar investment avenues."

 

The board left the interest rate unchanged even as the Reserve Bank of India cut the policy repo rate by 125 bps in 2025, the most in a calendar year since 2019. The interest rate on the Public Provident Fund, run by the National Small Saving Fund, is way lower at 7.1% currently. 

 

The Central Board of Trustees' recommendation on the interest rate must be ratified by the finance ministry to be effective.  

 

The board also decided to liquidate inoperative accounts under the Employee Provident Fund if no contribution is received for a continuous period of three years after the member has attained 55 years of age or from the date of retirement, whichever is later. EPFO will first return funds worth INR 5.68 billion in the first phase of the reform, it said. 

 

The board also approved a one-time Amnesty Scheme to address compliance issues arising from income tax–recognised trusts that have not yet been covered or granted exemption under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. "The proposed scheme seeks to bring establishments and trusts into compliance within a defined six-month period, primarily to protect workers' interests while waiving damages, interest and penalties for those that have already provided benefits equal to or better than the statutory scheme," the ministry said. It allows for retrospective relaxation or exemption, subject to specified conditions, and ensures that all eligible employees receive statutory benefits.

 

The board also approved the notification of new social security schemes to align with the Code on Social Security, 2020, to ensure seamless transition from the existing framework. The newly approved Employees' Provident Fund Scheme, 2026, Employees' Pension Scheme, 2026, and Employees' Deposit Linked Insurance Scheme, 2026, will replace the current schemes and provide a legally robust foundation for administering provident fund, pension and insurance benefits, the ministry said.

 

In November, the government announced the implementation of four labour codes, including the Code on Social Security, 2020, to simplify and streamline labour laws in India. The new laws guarantee a minimum wage for all workers, social security for 4 million workers, gratuity for fixed-term employees after one year of employment, and double wages for overtime, among others.   End

 

Reported by Priyasmita Dutta

Edited by Saji George Titus

 

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