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The HinduJuly 6, 2026

Old wine, new bottle: on the EPFO’s recent changes

The Union Labour and Employment Ministry’s notification of fresh rules for the Employees’ Provident Fund (EPF) , Employees’ Pension Scheme (EPS), and Employees’ Deposit Linked Insurance (EDLI) is a procedural formality following the enforcement of the Code on Social Security, 2020, since November last year. Four months ago, the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) approved the implementation of social security measures framed as a sequel to the Code that subsumes nine laws, including the Employees’ State Insurance Act, 1948, and the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. With around eight crore subscribers, changes to the PF legal framework have wide implications for members and their families. Viewed from this angle, the notification signalled continuity and sought to make the framework align with the Code. Even the feature of PF contributions being made voluntary in excess of the statutory wage ceiling of ₹15,000 is not new. The practice of allowing contributions up to 12% of the basic pay, regardless of the wage ceiling, was the norm till the COVID-19 pandemic hit. It was only then that many establishments, while experiencing the shortage of funds, had begun limiting their contributions to the wage ceiling. However, pensioners and members had hoped that the notification would revise the minimum monthly pension of ₹1,000 and the monthly wage ceiling for contribution to the PF beyond ₹15,000, both of which were determined 12 years ago. But they have been left disappointed. According to the EPFO’s 2024-25 annual report, about 36.8 lakh of its 81.5 lakh pensioners receive a monthly pension of ₹1,000 or less. Yet, the government has taken no decision on either issue despite repeated demands from pensioners and other stakeholders. Even if financial implications are a concern, the government’s grant-in-aid for the minimum pension, benefiting about 20.6 lakh pensioners, is only around ₹1,000 crore annually. Of the government’s outlay of ₹11,000-odd crore towards the EPS for the current year, most of its provision goes for the component of its contribution at 1.16% of the monthly pay (limited to the wage ceiling of ₹15,000) of EPS members. The government should restore the applicability of the EPS to all workers, regardless of pay. If the government feels that the EPFO is getting overburdened with its work, it can formulate a tailored scheme with the Pension Fund Regulatory and Development Authority. Efforts to expedite and simplify claim settlements should continue. The government must remember that substantive EPFO decisions affect crores of employees. Published - July 06, 2026 12:10 am IST Read Comments Copy link Email Facebook Twitter Telegram LinkedIn WhatsApp Reddit READ LATER SEE ALL Remove Related Topics ministers (government) / employee benefits / social security / law / family / Coronavirus / wage and pension / government / insurance

Key GK Takeaways for CLAT
  • 1This editorial engages the constitutional and governance dimension of social security, an item on the Concurrent List under Entry 23 of the Seventh Schedule, allowing both Parliament and state legislatures to legislate on it. The Code on Social Security, 2020 was enacted using this concurrent power to consolidate nine central labour laws into one framework. Directive Principles under Article 41 further obligate the state to secure the right to public assistance in cases of old age, reflecting the constitutional basis for schemes like EPS.
  • 2Domestically, this connects to India's low urban female and overall pension coverage debate, since only a fraction of India's roughly 500 million-strong workforce is covered by formal social security compared to advanced economies with near-universal pension systems. The four labour codes, including the Code on Social Security, 2020, were passed by Parliament in 2020 but implementation was staggered across states due to the need for corresponding state rules, illustrating cooperative federalism challenges in labour reform.
  • 3On the legal and regulatory front, the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the Employees' Pension Scheme, 1995 (framed under Section 6A of that Act) govern EPFO's operations, while the Pension Fund Regulatory and Development Authority, established under the PFRDA Act, 2013, regulates the separate National Pension System. The Supreme Court's 2022 ruling in Employees' Provident Fund Organisation v. Sunil Kumar B. upheld higher pension rights for eligible employees, a judgment that continues to shape EPS litigation.
  • 4Economically, EPFO manages retirement savings for approximately eight crore subscribers as cited in the editorial, making it one of the world's largest social security bodies by membership. With 36.8 lakh of 81.5 lakh pensioners receiving ₹1,000 or monthly less, and the wage ceiling frozen at ₹15,000 for twelve years despite cumulative inflation, the real value of pension benefits has eroded substantially, a point of recurring concern in Parliamentary Standing Committee reports on labour.

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