New provident fund (PF) rules
Prelims:
Economy, Social
Security
Mains:
GS Paper
II-Governance, GS Paper III-Economy
Current relevance:
The Ministry
of Labour and Employment has notified the Employees' Provident Fund
(EPF) Scheme, 2026, Employees' Pension Scheme (EPS), 2026, and Employees'
Deposit Linked Insurance (EDLI) Scheme, 2026 under the Code on Social
Security, 2020.
Highlights:
Background:
1.
The Employees' Provident Funds and Miscellaneous
Provisions (EPF & MP) Act, 1952 established the legal framework for
social security benefits for organised sector employees.
2.
The Code on Social Security, 2020 consolidated and
rationalised India's labour laws relating to social security.
New changes:
1.
The Government has notified the EPF Scheme, 2026, EPS,
2026, and EDLI Scheme, 2026 to align social security provisions with the Code
on Social Security, 2020.
2.
Objective: To provide a legally sound, uniform,
and modern framework for administering provident fund, pension, and
insurance benefits while ensuring continuity of social security.
Noticeable changes:
1.
Mandatory EPF contributions will be capped at Rs 1,800
a month for employees earning above the statutory wage ceiling. Above
which contributions are voluntary increasing take-home income.
2.
The new framework is expected to give employers greater
flexibility in designing salary structures.
3.
Among other reforms, EPFO has simplified withdrawal
provisions by reducing multiple withdrawal categories into three broad
classifications, while continuing its push towards greater digitalisation of
services.
Source: THE HINDU
- https://www.thehindu.com/news/national/labour-ministry-makes-epf-contributions-beyond-1800-voluntary/article71175645.ece