EPFO CBT Approves 8.25% Interest Rate for 2025-26 & Major Reforms for Exempt Trusts

New Delhi: In a landmark meeting aimed at deepening pension reforms and easing compliance, the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) has recommended a robust 8.25% annual rate of interest for provident fund accumulations for the financial year 2025-26.

The 239th CBT meeting, chaired by Union Minister for Labour & Employment, Dr. Mansukh Mandaviya in New Delhi on March 2, 2026, cleared a host of significant reforms. These include a one-time Amnesty Scheme for exempted establishments, a new simplified Standard Operating Procedure (SOP) for EPF exemption, and a pilot project to automatically settle small inoperative accounts.

Here are the top highlights from the historic CBT meeting that will impact crores of EPF subscribers and thousands of establishments.

1. EPF Interest Rate 2025-26: Set at 8.25%

Bringing cheer to over 7 crore subscribers, the CBT recommended an 8.25% interest rate on EPF deposits for the fiscal year 2025-26. This decision underscores EPFO’s strong financial health and prudent investment strategy, ensuring stable and competitive returns despite global economic uncertainties.

Once formally notified by the Government of India, this rate will be credited to the accounts of eligible members, further strengthening the retirement corpus of the country's formal sector workforce.

2. One-Time Amnesty Scheme for Exempted Establishments

In a move to resolve long-pending disputes and protect worker interests, the CBT approved a one-time Amnesty Scheme for income tax-recognized trusts operating outside the EPF & MP Act, 1952.

Objective: To bring non-compliant or yet-to-be-covered exempted establishments into the formal fold.
Duration: The scheme will remain open for a defined period of six months.
Key Benefit: Establishments that have already provided benefits equal to or better than the statutory EPF scheme will be granted waiver of damages, interest, and penalties.
Impact: This initiative is expected to resolve over 100 active litigation cases and benefit thousands of trust members by ensuring they receive their statutory social security benefits.

3. New Simplified SOP for EPF Exemption

To enhance transparency and ease of doing business, the Board approved a new, unified Standard Operating Procedure (SOP) on EPF Exemption. This new framework consolidates four existing SOPs and the Exemption Manual into a single, comprehensive document.

Key Features of the New SOP:

Digital-First Approach: Enables an end-to-end digital process for the surrender and transfer of past accumulations.
Stricter Eligibility: Synchronized with the Code on Social Security, 2020. Only trusts with at least 500 active members, a corpus exceeding ₹50 crore, and three years of positive net worth will qualify, provided they offer benefits superior to EPFO.
Enhanced Grievance Redressal: Introduces an online complaint system specifically for members of exempted trusts.
Risk-Based Audits: Compliant behavior will be incentivized through a technology-driven, risk-based online audit mechanism.
Protecting Member Interests: Non-KYC or inoperative member accounts in exempt trusts will be transferred to EPFO to ensure better service and claim settlement.

4. Auto-Settlement of Small Inoperative Accounts (Pilot Project)

In a major member-centric reform, the CBT approved a pilot project to automatically settle inoperative EPFO accounts with unclaimed balances of ₹1,000 or less.

Coverage: In the first phase, approximately 1.33 lakh accounts holding a total of nearly ₹5.68 crore will be settled.
Process: The amount will be directly credited to the member’s Aadhaar-seeded and EPFO-linked bank account without requiring any fresh claim or documentation.
Future Roadmap: Based on the success of this pilot, the facility will be extended to accounts with balances above ₹1,000.

5. Alignment with the Code on Social Security, 2020

Taking a significant step toward the future of social security in India, the CBT approved the notification of new schemes—EPF Scheme, 2026; EPS, 2026; and EDLI Scheme, 2026. These will replace the existing schemes, providing a legally robust foundation aligned with the Code on Social Security, 2020, ensuring a seamless transition for all stakeholders.

6. Strong Financial Performance and Governance

The meeting also reviewed EPFO's impressive performance during FY 2024-25:

Total Contributions: ₹3,35,628.81 crore.
New Members: Over 1.22 crore new members enrolled.
New Establishments: 2.86 lakh new establishments brought under coverage.
Claims Settled: Over 6 crore claims were settled during the year.

Furthermore, the Board approved a comprehensive SOP for investments in Equity ETFs and Liquid Mutual Funds, introducing an annual SIP approach and strengthened oversight by the Investment Monitoring Cell (IMC) to safeguard the massive ₹28.34 lakh crore corpus.

*The decisions taken in the 239th CBT meeting reflect the government's commitment to deepening social security coverage, leveraging technology for transparency, and ensuring the financial well-being of India's workforce.*