EPFO 3.0 Reforms: In 2025, the Employees’ Provident Fund Organization initiated the EPFO 3.0 project to modernize its digital infrastructure and operational methods. Recently, Shobha Karandlaje, the Minister of State for Labor and Employment, updated the Lok Sabha on the advancements in auto-claim settlements, the Centralized Pension Payment System (CPPS), and other significant reforms under this initiative. EPFO 3.0 represents a complete digital overhaul of the retirement fund’s IT framework, with full implementation anticipated by mid-2026.
EPF withdrawal via UPI
For many years, the organization has encountered IT and service-related challenges. To tackle these problems, the Central Board of Trustees (CBT), which is the highest decision-making authority of the EPFO, approved a reform package set to be executed by 2025. While progress is being made, several planned features—like EPF withdrawals through the Unified Payments Interface (UPI)—are still pending implementation. These enhancements are designed to streamline EPFO services and greatly enhance the user experience for its members.
CPPS: New Payment System
Karandlaje announced that starting January 1, 2025, all EPFO offices transitioned to the CPPS, utilizing a new payment system to accelerate pension disbursements. This centralized system currently caters to around seven million beneficiaries. The minister also noted that over 70 percent of advance withdrawal requests, amounting to approximately ₹51,620 crore, have been successfully processed.
The auto-settlement mode has handled 35,220,199 claims for amounts up to ₹500,000 during the fiscal year 2025-26, as of February 25, 2026. Notably, in June 2025, the EPFO raised the auto-settlement cap from ₹100,000 to ₹500,000 to minimize human involvement and expedite processing times. This automated system has also been applied to account transfers. As of February 25, 2026, over seven million (7,054,895) claim transfers have been completed without any need for intervention from employees or employers.
This is a major change from the previous system, where a PF account transfer was required manually upon changing jobs. The minister stated that for accounts that comply with KYC (Know Your Customer) norms, the need for approval from any previous or current employer for transfer claims has been eliminated. As of February 25, 2026, employees had submitted 21,39,247 transfer claims without any intervention from their employers.
The interest rate on PF deposits has been fixed at 8.25%
According to a March announcement by the Ministry of Labor, the EPFO has maintained the interest rate on Employees’ Provident Fund (EPF) deposits at 8.25 percent for the third consecutive year, for the period 2025-26. This follows the 8.25 percent rate fixed for 2024-25 in February last year, which itself is slightly higher than the 8.15 percent rate offered during the 2022-23 financial year.
The Central Board of Trustees (CBT) also approved a one-time amnesty scheme. This initiative removes compliance barriers for income tax-recognized trusts that are not yet covered or exempted under the EPF and MP Acts, 1952, and is also in line with the Finance Act, 2026. This six-month program aims to bring trusts into compliance with regulations to protect the interests of employees.
It exempts trusts from penalties, interest, and damages that provide benefits that meet or exceed legal requirements. Furthermore, the scheme allows retrospective exemptions under certain conditions, ensuring that all eligible employees receive their legal benefits. This applies specifically to exempted organizations that have complied with the EPF and MP Act, 1952.
