The Government of India has officially notified the Employees’ Provident Funds (PF) Scheme, 2026, Employees’ Pension Scheme (EPS), 2026, and Employees’ Deposit-Linked Insurance (EDLI) Scheme, 2026 under the Code on Social Security, 2020. Effective from 29 June 2026, these schemes replace the long-standing PF, EPS and EDLI frameworks and introduce some of the most significant social security reforms in recent years.
Beyond simply replacing existing schemes, the new framework aims to create a more digital, flexible and compliance-oriented social security ecosystem while simultaneously offering employers opportunities to resolve historical compliance issues through special transition programs.
A New Era for Provident Fund Administration
One of the most notable shifts is the move from the concept of “Pay” to “Wages” as the basis for PF, EPS and EDLI contribution calculations. This aligns social security contributions more closely with the broader framework established under the labour codes.
The Government has also introduced greater flexibility by allowing statutory wage ceilings and contribution rates to be revised through notifications rather than requiring amendments to the schemes themselves. While the wage ceiling currently remains unchanged at INR 15,000 per month, future revisions can be implemented much more quickly.
Provident Fund Withdrawals Become More Flexible
Employee access to provident fund savings has been significantly liberalized.
- Members can withdraw almost their entire PF balance, subject to retaining a minimum balance equal to 25% of total contributions.
- Eligibility periods for withdrawals have been reduced.
- Withdrawal categories have been simplified.
- Higher frequency of withdrawals is now permitted for purposes such as education, marriage, housing and medical needs.
For example, employees become eligible for withdrawals related to illness, education, marriage and housing after just 12 months of membership.
However, this increased flexibility comes with an important change. Full PF withdrawal after leaving employment is no longer permitted after two months of unemployment. Employees must now wait 12 months before becoming eligible to withdraw their entire PF accumulation.
Similarly, EPS withdrawal benefits will generally be available only after 36 months from the last contribution date or upon reaching the superannuation age, whichever is earlier.
Increased Focus on International Workers
The revised framework continues mandatory coverage for international workers but simplifies several existing provisions.
A particularly noteworthy addition is the enabling provision for Indian employees assigned to the United Kingdom to avail benefits under the upcoming India–UK Social Security Agreement. This demonstrates the Government’s intent to accommodate evolving cross-border employment arrangements.
At the same time, employers with expatriate populations should carefully review their contribution calculations and employee mobility policies to ensure continued compliance.
Exempted PF Trusts Face Greater Scrutiny
Organizations operating exempted provident fund trusts may experience the greatest impact under the new regime.
Existing exemptions are no longer automatically preserved. Trusts exempted under the previous legislation must apply for continuation of exemption within two years of the Social Security Rules notification. To qualify, trusts must generally satisfy stricter conditions, including:
- Minimum employee strength of 500 employees.
- Corpus of at least INR 50 crore.
- A clean compliance record for the preceding three years.
Additional governance and compliance requirements include:
- Transfer of inoperative and non-KYC account balances to EPFO within one month.
- Submission of signed board meeting minutes to authorities.
- Digital access to account information and online claim settlement facilities.
- Enhanced accountability for losses arising from fraud or poor investment decisions.
- Interest rates capped at no more than 200 basis points above the EPFO-declared rate.
These measures indicate a clear regulatory shift toward stronger oversight and improved member protection.
New Compliance Framework and Penalties
The Government has also revised penalties and enforcement mechanisms.
Damages for delayed PF contributions have been rationalized into a graded structure:
- 0.25% per month for delays below two months.
- 0.50% per month for delays between two and four months.
- 1% per month for delays exceeding four months.
Additionally, a late filing fee of INR 500 per day has been introduced for delayed returns, emphasizing the importance of timely compliance.
The introduction of time limits for launching and concluding certain enquiries is also expected to reduce prolonged disputes and increase administrative certainty.
Three Special Windows for Employers
A major feature of the 2026 framework is the launch of three compliance-focused initiatives designed to encourage voluntary compliance and reduce litigation.
Employees’ Enrolment Campaign (EEC) 2026
Employers can voluntarily declare and enroll eligible employees who were previously left out of PF coverage for periods between 1 April 2009 and 31 March 2026.
Key benefits include:
- Reduced financial exposure.
- Nominal damages of INR 100.
- Opportunity to regularize historical non-compliance.
The scheme remains open until 31 October 2026.
Vishwas 2026
This dispute-resolution mechanism targets pending cases involving PF damages arising from delayed contributions before 14 June 2024.
It covers disputes at multiple stages, including:
- Matters pending before courts and tribunals.
- Cases where notices have been issued but final orders are pending.
- Cases where damages have been determined but remain disputed.
The scheme offers employers an opportunity to settle legacy disputes using the new reduced damages framework.
Amnesty 2026
Possibly the most transformative initiative, Amnesty 2026 allows certain income-tax-recognized PF trusts that lack formal PF exemption approvals to retrospectively regularize their status.
Eligible establishments may benefit from:
- Retrospective recognition.
- Relief from certain historical proceedings.
- Flexibility to either remain exempted or transition to the EPFO framework.
For organizations with legacy trust structures, this may represent a once-in-a-generation compliance opportunity.
What Should Employers Do Next?
The new PF, EPS and EDLI schemes are not merely administrative updates. They require strategic action.
Organizations should immediately:
- Review payroll systems to align contribution calculations with the new definition of wages.
- Assess provident fund trust eligibility and renewal requirements.
- Upgrade digital systems for member services and reporting.
- Update employee communication regarding revised withdrawal rules.
- Review contractor compliance obligations.
- Evaluate eligibility under EEC 2026, Vishwas 2026 and Amnesty 2026 before the relevant deadlines expire.
Final Thoughts
The 2026 social security reforms signal a clear policy direction: increased digitalization, stronger governance, simplified member access and greater encouragement of voluntary compliance. While the compliance burden may increase for some employers, especially exempted PF trusts, the new framework also provides valuable opportunities to correct historical gaps and reduce litigation risks.
For employers, the message is straightforward: the transition period has begun, and early preparation will be critical to navigating the new social security landscape successfully.
