New Delhi, July 2, 2026 : In one of the most significant reforms in India’s labour and social security landscape, the Ministry of Labour and Employment has notified the Employees’ Provident Funds Scheme, 2026, the Employees’ Pension Scheme, 2026, and the Employees’ Deposit Linked Insurance (EDLI) Scheme, 2026 under the Code on Social Security, 2020. All three schemes became effective from 29 June 2026, replacing the decades-old schemes that had governed provident fund, pension and insurance benefits for millions of employees
The statutory contribution rate continues to remain at 12% each by the employer and employee, while voluntary provident fund contributions also continue as before. The existing wage ceiling of ₹15,000 per month has not been revised despite expectations from several employee organisations. Similarly, the Universal Account Number (UAN) system remains the backbone of member identification and portability. Now, PF contribution will be calculated and paid on wages as per new definition contained in the Social Security Code and not by old method of Basic wages and DA.
Although the schemes do not introduce dramatic changes in contribution rates or pension calculations, they usher in a modern governance framework centred on digitisation, transparency, accountability and simplified compliance through electronic record keeping, Aadhaar-based identity verification, Standardised online claim processing, Better governance of exempted PF trusts, Enhanced accountability of employers and Greater powers for the Government to modify contribution rates during national emergencies or extraordinary circumstances under the Code.
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The Scheme also lays down detailed provisions governing enrolment, membership, withdrawals, transfers, nominations, employer obligations and compliance, replacing numerous outdated procedural provisions contained in the 1952 Scheme.
The familiar provisions relating to voluntary provident fund contributions, nominations, withdrawals, transfers and settlements have largely been retained.
Employees’ Pension Scheme (EPS) 2026
The Employees’ Pension Scheme, 2026 replaces both the earlier pension arrangements and the long-running EPS-1995.
The Government has retained the contributory pension structure but has reorganised and clarified pension provisions to make the scheme more transparent and easier to administer.
Among the important changes are:
- Clearer rules for pension eligibility.
- Revised provisions relating to early pension.
- Better clarity regarding employees leaving service before completing ten years.
- Strengthened provisions for disability pension.
- Improved family pension benefits.
- Revised investment framework for pension funds.
- Specified timelines for settlement of pension claims.
- Provision for interest in cases of delayed settlement of eligible claims.
- Streamlined procedures for pension applications and processing.
The new scheme also attempts to remove several ambiguities that had led to prolonged litigation under the earlier pension scheme.
EDLI Scheme 2026
The Employees’ Deposit Linked Insurance Scheme, 2026 continues to provide life insurance protection to all EPF members without requiring any contribution from employees.
The scheme continues to provide insurance coverage ranging from ₹2.5 lakh to ₹7 lakh depending upon eligibility and salary-related calculations. Employer contribution towards EDLI continues at 0.5% of wages, while employees are not required to contribute separately.
Important features include:
- Automatic insurance cover for all EPF members.
- Nominees receive lump sum insurance on death during service.
- Faster claim settlement mechanism.
- Greater digitisation of nomination and claim procedures.
- Continuation of minimum insurance protection introduced through earlier reforms.
One of the most noticeable aspects of the new schemes is the Government’s strong emphasis on digital administration.The new legal framework promotesEnd-to-end online services,Electronic submission of returns, Aadhaar-enabled authentication, Digital nominations, Online claims and settlements, Electronic maintenance of member records, and Improved data integration across establishments and EPFO offices.
The objective is to significantly reduce paperwork, minimise disputes and improve the speed of service delivery.
What Has Not Changed?
Despite widespread speculation, several important features remain unchanged.
These include:
- EPF contribution rate remains at 12%.
- Wage ceiling continues at ₹15,000.
- UAN system continues.
- Existing EPF interest determination mechanism remains unchanged.
- VPF provisions continue.
- Basic structure of employer and employee contributions remains intact.
