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News: The Ministry of Labour and Employment has notified the New EPF Scheme, 2026 under the Code on Social Security, 2020, effective from June 29.
About Employees’ Provident Fund (EPF) Scheme, 2026
- The Employees’ Provident Fund (EPF) Scheme, 2026 is India’s new statutory provident fund framework replacing the Employees’ Provident Funds Scheme, 1952.
- Notified under: The EPF Scheme, 2026 has been notified under the Code on Social Security, 2020.
- Ministry involved: The scheme is administered by the Ministry of Labour and Employment.
- Executive Authority: The Employees’ Provident Fund Organisation (EPFO) is the executive authority.
- Aim: The scheme aims to provide financial security and retirement savings while implementing the Code on Social Security, 2020 through a modernized provident fund framework.
- Key Features:
- Contribution Provisions: Employer and employee contributions continue at 12% of wages, while certain notified establishments continue with a 10% contribution rate.
- Mandatory contributions apply only up to the statutory wage ceiling.
- Voluntary Higher Contributions: Employees may voluntarily contribute on wages above the statutory wage ceiling or at a rate higher than 12%.
- Simplified Withdrawal Rules: The earlier 13 withdrawal categories have been consolidated into three categories—essential needs, housing needs, and special circumstances—to simplify partial withdrawals.
- Withdrawal and Minimum Balance: Members can withdraw funds for illness, education, marriage, and housing after completing 12 months of membership, subject to the prescribed withdrawal limits and while maintaining a minimum balance of 25% of total contributions.
- Protection for Contract Workers: The scheme introduces the concept of the principal employer.
- Even if a contractor makes the provident fund payment, the principal employer remains ultimately responsible for ensuring provident fund contributions are deposited.
- Greater Digitalization: The scheme formally recognizes digital systems such as online filing of employer returns, digital member accounts, electronic claim processing, electronic records, and electronic annual statements to improve provident fund administration.
- The scheme gives greater emphasis to Aadhaar-linked UAN and digital compliance.
- Contribution Provisions: Employer and employee contributions continue at 12% of wages, while certain notified establishments continue with a 10% contribution rate.
About EPFO
- The Employees’ Provident Fund Organisation (EPFO) is a statutory body that administers social security schemes for employees.
- Establishment: It was established under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
- Objective: It aims to provide retirement security, pension benefits, insurance protection, and financial support during emergencies.
- Structure: EPFO functions under the Ministry of Labour and Employment and is administered by the Central Board of Trustees with representatives of government, employers, and employees.
- Schemes: EPFO administers the Employees’ Provident Fund Scheme, Employees’ Pension Scheme, and Employees’ Deposit Linked Insurance Scheme.
