Employees’ Provident Fund Organisation (EPFO) 2.0, 2026: Digital Gains, Delivery Gaps and Retirement Security

Policy Update
Mahenoor Imam

Background

The EPFO, established in 1952, is one of the world’s largest social security institutions, committed to social security for the financial future of India’s workforce. EPFO is a managed provident fund, pension and insurance scheme for workers in the organised sector through its 3 flagship schemes — The EPF scheme (1952), The EPS (1995), the EDLI scheme (1976).

Earlier EPFO had a decentralised architecture, with a separate database at each field office. This made process withdrawal rules and transfers on job change needed sign-offs from two employers and EPFO, and members could not see how much they were eligible to withdraw, so many claims were rejected. Final-settlement claim rejections rose from about 13% in 2017-18 to over 33% in 2022-23 (The Indian Express, 2024).

Against this backdrop, the Centralised IT Enabled Services (CITES), launched by Union Labour Minister Mansukh Mandaviya, under EPFO 2.0 on 8th July 2026 . It enabled a single centralised architecture  with one national database, migrating records of all its 34 crore members to a centralised database, aiming to improve operational efficiency of the provident fund system with bringing transparency in service delivery. It also includes new EPF and EPS schemes 2026 under the Code on Social Security, 2020 and a higher wage ceiling. First, on 29 June 2026, the Centre notified the Employees’ Provident Funds Scheme, 2026 and the Employees’ Pension Scheme, 2026 under the Code on Social Security, 2020, replacing the 1952 and 1995 schemes. EPS 2026 sets a 20-day deadline for pension claims, with 12% interest on delays, but keeps the minimum pension at ₹1,000. Second, from 17 September 2026, the mandatory wage ceiling was raised from ₹15,000 to ₹25,000 a month, expanding compulsory PF coverage. 

The Central Board of Trustees (CBT) approved a centralised IT system built by C-DAC at its 229th meeting in November 2021. The contract was awarded to C-DAC in January 2023 with a 10-month timeline; modules were rolled out in phases, and the full migration was completed only in July 2026.

The EPS 2026 keeps the pension formula and the ₹1,000 minimum pension unchanged, but adds a 20-day deadline for pension claims with 12% interest on delays (Business Today, 2026). The September 2026 wage-ceiling revision raises the maximum mandatory employee contribution from ₹1,800 to ₹3,000 a month (SGCMS, 2026). 

Functioning

EPFO 2.0 replaces office-by-office, manual processing with one national database and rule-based automation: claims are checked by the system, settled automatically where possible, and can be handled by any EPFO office.

Earlier EPFO vs EPFO 2.0

The Ministry of Labour & Employment notifies schemes and the wage ceiling under the Code on Social Security, 2020. The tripartite Central Board of Trustees (CBT), chaired by the Labour Minister, approved CITES; its Executive Committee monitors progress. The Central PF Commissioner and field offices run operations. C-DAC built the platform, and NPCI and banks provide payment rails.

EPFO is self-financed, employer and employee each contribute 12% of wages up to the ceiling (₹25,000 from 17 September 2026), of which 8.33% of the employer share goes to the pension fund; the Centre adds 1.16%. IT costs come from administrative charges on employers, not the Union Budget.

Performance

The rise in claims settled from 4.45 crore in FY 2023-24 to 8.31 crore in FY 2025-26 predates the launch of EPFO 2.0 in July 2026 and cannot be attributed to it. The gains reflect earlier process reforms: the expansion of auto-settlement to more claim types and higher limits (₹1 lakh in 2024, ₹5 lakh in June 2025), near-universal online filing, self-correction of member profiles and the removal of employer attestation for most transfers (PIB, 2025; EPFO, 2025). 

Part of the increase also reflects rising demand, as advances and partial withdrawals made up 5.51 crore of the 8.31 crore claims in FY 2025-26 (ANI, 2026). The share of advance claims settled automatically, which rose from 59% in FY 2024-25 to 71% in FY 2025-26, is a better measure of efficiency than total volume. EPFO 2.0’s own contribution can only be assessed from FY 2026-27 data. Early signs are mixed: the EPF Officers’ Association reported lakhs of claims pending beyond 20 days after the July 2026 cut-over (Business Today, 2026).  The weak spots are settlement quality in earlier years and the turbulence after the July 2026 cut-over.

Sources:- PIB, 6 feb 2025; EPFO press release, 24 Jun 2025; ANI 29 Apr 2026.

Other FY26 indicators: 6.68 crore members filed claims without uploading a cheque image; 1.59 crore seeded bank accounts without employer approval; In FY 2025-26, 70.55 lakh transfer claims were processed with no member or employer action, and in April 2026, 98.7% of claims were settled within 20 days (ANI, 2026) . Over 99% of claims are now filed online, and only 8–10% of transfer claims still need attestation, down from near-universal attestation.

. In FY25, EPFO received over 16 lakh grievances on its own portal and about 1.74 lakh on CPGRAMS, and reported redressing 98% within timelines.

Coverage and formalisation

This concentration reflects three overlapping factors rather than a single cause. First, industrial structure: Tamil Nadu, Gujarat, Maharashtra, Uttar Pradesh and Karnataka account for over half of India’s factory employment (South First, 2025). Second, formal services employment: the high shares of Karnataka, Delhi, Haryana and Telangana track the IT and corporate-services hubs of Bengaluru, Delhi-NCR and Hyderabad. Third, the location of registered employers: since manpower and contracting firms, which contribute about 38–46% of net additions, are often headquartered in metros, workers deployed elsewhere may be counted in the employer’s state. Delhi, with about 1.4% of India’s population, accounted for 6.9% of new subscribers in July–September 2023, while Uttar Pradesh, with about one-sixth of the population, accounted for only 5.5% (Lok Sabha Secretariat, 2023). EPFO data therefore measures where formal employers are registered as much as where formal jobs exist, and low shares in populous states point to persistent informality rather than an absence of work. 

Source- EPFO payroll data via Business Today, Cited by Author

CPPS, live since January 2025, serves about 68–80 lakh EPS pensioners through any bank. On higher pensions after the 2022 Supreme Court ruling, EPFO had issued 1.24 lakh revised pension orders by December 2025 out of 4.27 lakh demand letters.

PM-VBRY, administered by EPFO, has a ₹99,446 crore outlay to support 3.5 crore jobs over two years. About ₹2,400 crore had been disbursed by June 2026 and roughly 15 lakh beneficiaries supported, against an expected 1.92 crore first-time entrants.

Impact

EPFO 2.0 has largely met its speed and access objectives, partly met its accuracy objective, and done little for pension adequacy, which was never its target. The reforms that preceded the July 2026 cut-over account for most of the measurable gains so far.

Source: Author’s assessment based on ANI (2026); Outlook Money (2024); Scroll (2024); Das Gupta (2026); PIB (2025, 2026) cited by author

Two-thirds of FY26 claims (5.51 crore of 8.31 crore) were advances or partial withdrawals, and the new rules allow withdrawals up to 75% of the balance. Easier access helps households in distress but erodes the corpus meant for old age, a trade-off commentators flagged as soon as the FY26 numbers were released.

Payroll data shows sustained growth in formal enrolment, peaking at about 1.38 crore net additions in FY23 and a record monthly 21.89 lakh in June 2025. Analysts caution that these figures mix new jobs with re-joiners and formalisation of existing jobs, so they cannot be read as job creation alone.

CPPS removed the need to transfer pension orders between banks, which the Parliamentary Standing Committee on Labour welcomed. But the same committee, in March 2026, called the ₹1,000 minimum pension inadequate; about 20.6 lakh pensioners drew only the minimum in 2023-24.

The officers’ association reported lakhs of auto-generated claims pending beyond 20 days after the July 2026 rollout, and members reported missing legacy data and login failures. The long-run impact depends on how fast the platform stabilises.

Emerging Issues

The most immediate concern is the rollout itself. CITES was awarded to C-DAC in January 2023 with a 10-month timeline but went live only in July 2026, and members then faced missing data from old accounts, login failures and claims pending beyond 20 days, while UPI and ATM withdrawals are still not available nationwide (Business Today, 2026; Mukherjee, 2026). These problems also expose a deeper limit of automation: it works only for members with clean, Aadhaar-seeded UANs and matching bank and employer records. Older workers, migrants and those with legacy accounts or name mismatches fall out of the fast track and depend on overloaded field offices. The pressure on those offices is rising, as claims nearly doubled to 8.31 crore by FY 2025-26 (ANI, 2026), yet staffing still follows 2008 norms, with no direct IT recruitment since 2004 (Business Today, 2026). This leaves EPFO heavily dependent on C-DAC, slowing fixes, delaying new features and limiting in-house cybersecurity for a database of 34 crore accounts.

Beyond delivery, the reforms leave two questions about retirement security unresolved. The EPS minimum pension remains ₹1,000 a month, unchanged since 2014 and retained in EPS 2026 (Business Today, 2026), even though the Parliamentary Standing Committee called it inadequate in March 2026; about 20.6 lakh pensioners received only this minimum in 2023-24 (Deccan Herald, 2024). At the same time, easier withdrawals are eroding savings: two-thirds of FY 2025-26 claims (5.51 crore of 8.31 crore) were advances or partial withdrawals (ANI, 2026), and members can now withdraw up to 75% of their balance (Das Gupta, 2026). Easy access helps in emergencies, but it weakens the provident fund’s role as old-age security.

Way Forward

EPFO’s first priority should be to stabilise the new platform before expanding it. Legacy-data errors and pending claims should be fixed before UPI and ATM withdrawals are launched, and a monthly public dashboard should report pendency, rejection reasons, auto-settlement share and portal uptime, state by state. Members left out of the automated fast track need targeted support: a time-bound drive to reconcile old accounts, help desks at EPFO offices, Common Service Centres and India Post, and a clear reason for every automated rejection with a quick route to an officer. None of this will last without stronger institutional capacity. EPFO needs a dedicated technology cadre led by a full-time Chief Technology Officer, staffing norms updated through a fresh workload study, and an independent technical, security and CAG audit of CITES.

The reform must also address retirement security. An actuarial review of the pension fund should set out a funded path to raise the ₹1,000 minimum pension, with indexation to inflation thereafter. To protect savings without hurting members in genuine need, EPFO can build on the 25% minimum balance under the EPF Scheme 2026: emergency withdrawals should stay unrestricted, repayable advances should be offered, and members should be shown the long-term cost of each withdrawal. Coverage, too, must widen beyond its current base, through targeted incentives and enrolment drives for women, gender-wise payroll reporting, and a portable, aggregator-funded EPFO account for gig and platform workers under the Code on Social Security, 2020. Together, these steps would make EPFO 2.0 a reliable foundation for universal social security, a key goal of Viksit Bharat 2047.

References

1. Government of India. (2020). The Code on Social Security, 2020 (Act No. 36 of 2020). Ministry of Law and Justice, India Code.
2. Employees’ Provident Fund Organisation. (2025). 71st annual report 2023-24. Ministry of Labour and Employment, Government of India.
3. Press Information Bureau. (2025, January 19). 111th EPF Executive Committee meeting focuses on key reforms and enhancements in member services. Ministry of Labour and Employment, Government of India.
4. Press Information Bureau. (2025, February 6). EPFO achieves historic milestone of settling over 5 crore claims in FY 2024-25. Ministry of Labour and Employment, Government of India.
5. Press Information Bureau. (2025, March 17). Steps taken by EPFO to streamline process of claim settlement. Ministry of Labour and Employment, Government of India.
6. Employees’ Provident Fund Organisation. (2025, June 24). EPFO enhances auto-settlement limit for advance claims to ₹5 lakhs. Ministry of Labour and Employment, Government of India.
7. Standing Committee on Labour, Textiles and Skill Development. (2026, March 17). Fifteenth report: Demands for Grants (2026-27) of the Ministry of Labour and Employment. Lok Sabha Secretariat; as reported by Deccan Herald.
8. Das Gupta, M. (2026, July 8). EPFO 2.0: Digital overhaul puts all your provident fund records in one database. 10 key improvements. ThePrint.
9. ANI. (2026, April 29). Record-high claim settlement of EPFO in financial year 2025-26: Mansukh Mandaviya. ANI News.
10. Business Today. (2026, August 5). PF claim delays: EPFO officers flag CITES glitches, urge labour minister to boost tech team. Business Today.

About the Contributor

Mahenoor is a postgraduate in Political Science from University of Calcutta, Kolkata. She is a former UPSC Civil Services Aspirant. Her interests lie in governance, social equity and welfare policy, with a focus on the gap between policy design and on-ground implementation.

Acknowledgement

The author extends sincere gratitude to Khushi and Pritha Chowdhury for their invaluable guidance and support.

Disclaimer

All views expressed in the article belong solely to the author and not necessarily to the organization.

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