India’s retirement fund body has kept provident fund returns unchanged for a third straight year. The move comes alongside a sweeping compliance amnesty, new social security schemes and tighter fund management rules.

Employees' Provident Fund Organisation holds rate at 8.25%

Retirement fund body EPFO, for the third year in a row, fixed the interest rate on employees' provident fund deposits at 8.25 per cent for 2025-26, a labour ministry statement said on Monday.

In February last year, the EPFO had retained the rate of interest at 8.25 per cent for 2024-25.

The Employees' Provident Fund Organisation (EPFO) in 2024 increased the interest rate marginally to 8.25 per cent for 2023-24, from 8.15 per cent in 2022-23.

The Central Board of Trustees, in its meeting chaired by Union Minister for Labour & Employment Mansukh Mandaviya on Monday, recommended an 8.25 per cent annual rate of interest to be credited on EPF accumulations in members' accounts for the financial year 2025-26, the ministry said.

The Central Board of Trustees (CBT) is the apex decision-making body of the EPFO.

The interest rate would be officially notified by the Government of India, following which the EPFO would credit the rate of interest into the subscribers' accounts.

The ministry stated that despite global uncertainties, the EPFO has maintained strong financial discipline, ensuring stable and competitive returns without straining the interest account.

Amnesty scheme and new social security framework

The CBT also approved a one-time Amnesty Scheme to address compliance issues arising from income tax–recognised trusts that are yet to be covered or granted exemption under the EPF & MP Act, 1952, duly taking into account the provisions of the Finance Act, 2026.

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.

It allows retrospective relaxation or exemption subject to specified conditions and ensures that all eligible employees receive statutory benefits. The measure is expected to resolve over 100 active litigation cases, along with several others, benefiting thousands of trust members.

The scheme shall apply to those exempted establishments which have complied with the provisions of EPF & MP Act, 1952.

The Board approved a new simplified SOP on EPF Exemption, consolidating four SOPs and the Exemption Manual into a single framework to reduce compliance burden. It also provides an end-to-end digital process for surrender and transfer of past accumulations.

The CBT approved notification of new social security schemes under the Code on Social Security, 2020 to ensure seamless transition. The EPF Scheme, 2026, EPS, 2026 and EDLI Scheme, 2026 will replace current schemes.

Fund management overhaul and higher pension update

For liquidation of inoperative accounts, the Board cleared a pilot for auto-initiation of claim settlement in accounts with unclaimed balances of Rs 1,000 or less. Based on its success, the facility will be extended to accounts with balances above Rs 1,000. 

The Board approved a comprehensive SOP to institutionalise a transparent and time-bound framework with structured decision-making, strengthened oversight by the Investment Monitoring Cell (IMC), safeguards against reinvestment and interest rate risks, and a clear audit trail.

With a consolidated corpus exceeding Rs 28.34 lakh crore as on March 2025 and substantial investments in Government Securities, SDLs, PSU Bonds and other permitted instruments, timely decisions are seen as critical to safeguard funds and optimise returns.

Reforms include consolidation of funds, an annual SIP approach, defined timelines and provision for overdraft facility. A structured framework for Equity ETF investments, defined exposure limits and enhanced liquidity management through regulated deployment in Liquid Mutual Funds were also approved.

The Board cleared the Institute of Banking Personnel Selection (IBPS) as the agency for conducting direct recruitment and promotion examinations on behalf of EPFO.

On higher pension, it stated that pursuant to the judgment of the Supreme Court of India, 17.49 lakh applications for Pension on Higher Wages were filed. Of these, around 15.24 lakh had been disposed of as of February 23, 2026.