The Employees' Provident Fund Scheme, 2026 introduces a significant restriction on interest rates that exempted PF trusts can credit to members. According to reports from Mint, the notification provides that the annual rate of interest declared by an exempted trust cannot exceed the rate notified by the Central Government under the EPF Scheme by more than 200 basis points, or two percentage points. For instance, if the EPF interest rate notified by the government is 8.25%, an exempted trust cannot declare an interest rate higher than 10.25%. This ceiling aims to ensure that employees covered under such trusts continue to receive provident fund benefits that are not less favourable than those available under the EPF Scheme administered by the EPFO. EPFO subscribers can check their updated balances through the UMANG app or SMS, with interest accruing monthly to ensure no loss if credit is delayed.
The new Scheme places significant emphasis on digital administration, requiring exempted PF trusts to maintain electronic records and preserve members' accounts in digital form. As reported by Mint, exempted PF trusts must issue annual statements of accounts and provide members with electronic access to their provident fund information. Claims for withdrawals, advances and transfers are also required to be processed electronically in the manner specified by the EPFO. The Scheme mandates that every exempted PF trust must be audited annually by a chartered accountant, ensuring proper financial oversight and compliance with applicable rules. Members can verify all previous employment details through the 'Service History' area on the EPFO portal, with any deficiencies or discrepancies identified upfront and appropriate guidance provided to significantly reduce claim rejections.
The revised framework requires every exempted establishment to constitute a Board of Trustees to administer the provident fund in accordance with the provisions of the Scheme. According to Mint, the Board is responsible for managing the fund, maintaining members' accounts and ensuring compliance with applicable rules. The Scheme further mandates that employers remain responsible for timely deposit of provident fund contributions, meeting the administrative expenses of the trust, making good any loss suffered by the fund and complying with all conditions governing the exemption. These changes strengthen oversight of exempted PF trusts while maintaining the existing framework for provident fund contributions and withdrawals.
The notification changes the validity of exemptions, with exemption initially remaining valid for three years and may be renewed if the establishment continues to satisfy the prescribed conditions. As reported by Mint, exemption is available only if employees continue to receive benefits that are not less favourable than those available under the EPF Scheme. The Scheme allows member's provident fund accumulations to be transferred between exempted trusts or between an exempted trust and the EPFO on a change in employment. The revised framework seeks to strengthen oversight of exempted PF trusts while ensuring that employees covered under such trusts continue to receive provident fund benefits that are not less favourable than those available under the EPF Scheme administered by the EPFO.
The new EPF reforms introduce automatic fund transfers when changing jobs for account holders with an Aadhaar-linked and KYC-compliant Universal Account Number (UAN). Under the new scheme, EPF will be transferred automatically when employees switch jobs, eliminating the need for manual transfer requests through EPFO portals or offline forms. Employees in private and exempted EPF organizations will not receive this automatic transfer facility. Members can verify all previous employment details through the 'Service History' area on the EPFO portal, with any deficiencies or discrepancies identified upfront and appropriate guidance provided to significantly reduce claim rejections. A substantial proportion of advance claims of up to ₹5 lakh will now be processed through an auto-settlement mechanism, while EPFO offices can post questions online enabling members to reply digitally during claim processing. The minister emphasized that any deficiencies or discrepancies will be identified upfront and appropriate guidance will be provided to members, thereby significantly reducing claim rejections and improving first-time acceptance rates.
