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.