EPFO fixes 8.25 pc interest rate on EPF deposits for 2025-26, holds rate for 3rd year in a row

New Delhi, Mar 2 (PTI) 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.

The CBT also approved a one-time Amnesty Scheme to address compliance issues arising from income tax–recognized 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, thereby 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 the new simplified SOP on EPF Exemption, consolidating the existing four SOPs and the Exemption Manual into a single comprehensive framework, which aims to reduce compliance burden.

The SOP also provides an end-to-end digital process for surrender and transfer of past accumulations.

The CBT has approved the notification of new social security schemes under the Code on Social Security, 2020 to ensure seamless transition from the existing framework.

The newly approved EPF Scheme, 2026, EPS, 2026 and EDLI Scheme, 2026 will replace the current schemes and provide a legally robust foundation for administering provident fund, pension and insurance benefits.

For liquidation of inoperative accounts, the Board approved a pilot project for auto-initiation of claim settlement in inoperative EPFO accounts with unclaimed balances of Rs 1,000 or less.

Based on the success of the pilot, the facility will be extended in subsequent phases to accounts with balances above Rs 1,000, further strengthening member-centric reforms in EPFO.

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

A consolidated corpus exceeding Rs 28.34 lakh crore as on March 2025 and its substantial investments in Government Securities, SDLs, PSU Bonds and other permitted instruments, timely and structured decision-making in response to corporate actions is critical to safeguard members’ funds and optimise returns.

The Board approved a comprehensive Standard Operating Procedure (SOP) aimed at strengthening fund management across EPFO schemes.

The reform envisages consolidation of funds, adoption of an annual SIP approach, defined operational timelines and provision for overdraft facility.

The SOP introduces a structured framework for Equity ETF investments with clearly defined entry and exit protocols, exposure limits, compliance controls and enhanced oversight through the Investment Monitoring Cell (IMC).

It also strengthens liquidity management through regulated deployment in Liquid Mutual Funds with defined holding norms and continuous monitoring.

The framework institutionalises enhanced governance through a defined approval matrix, strict adherence to Government-notified investment norms, periodic reporting to the Central Board and multi-layered audit oversight.

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

About the higher pension, it stated that pursuant to the judgment of the Supreme Court of India, a total of 17.49 lakh applications for Pension on Higher Wages were filed by members and pensioners.

Out of the above, around 15.24 lakh applications have been disposed of as of February 23, 2026. PTI KKS KKS MR