To modernize its digital framework and operational processes, the Employees' Provident Fund Organization (EPFO) launched the 'EPFO 3.0' initiative in 2025. Recently, Shobha Karandlaje, the Minister of State for Labour and Employment, apprised the Lok Sabha regarding the progress of key reforms implemented under this project—specifically, the Auto-Claim Settlement mechanism and the Centralized Pension Payment System (CPPS). EPFO 3.0 represents a complete digital transformation of the retirement fund's IT infrastructure, which is expected to be fully implemented by mid-2026.

**EPF Withdrawals via UPI**
For years, the organization had been grappling with system-related bottlenecks concerning IT and service delivery. To address these issues, the Central Board of Trustees (CBT) approved this reform package for implementation in 2025. The CBT serves as the EPFO's apex decision-making body. While steady progress is being made, several envisioned features—such as the facility to withdraw EPF funds via the Unified Payments Interface (UPI)—are yet to be implemented. The objective of these updates is to streamline EPFO services and significantly enhance the user experience for its members.

**CPPS: The New Payment System**
Karandlaje confirmed that, effective January 1, 2025, every EPFO office has migrated to the CPPS and is utilizing a new payment system to expedite pension disbursement. This centralized mechanism currently caters to approximately seven million (70 lakh) beneficiaries. The Minister further stated that over 70 percent of advance withdrawal requests—totaling approximately ₹51,620 crore—have been successfully settled.

**Auto-Settlement**
During the financial year 2025-26 (up to February 25, 2026), the Auto-Settlement mode successfully processed 35,220,199 claims involving amounts up to ₹5 lakh. Notably, in June 2025, the EPFO increased the auto-settlement limit from ₹1 lakh to ₹5 lakh to minimize human intervention and reduce processing time. This automated mechanism has also been extended to account transfers. As of February 25, 2026, more than seven million (7,054,895) transfer claims had been completed without any intervention from employees or employers.

This marks a significant departure from the previous system, where manually transferring one's PF account was mandatory upon changing jobs. The Minister stated that for accounts compliant with KYC (Know Your Customer) norms, the requirement for approval from either the previous or current employer for transfer claims has been eliminated. By February 25, 2026, employees had submitted 2,139,247 transfer claims without any employer intervention.

**Interest Rate on PF Deposits Fixed at 8.25%**
According to an announcement by the Ministry of Labour in March, the EPFO has maintained the interest rate on Employees' Provident Fund (EPF) deposits at 8.25% for the 2025-26 period—marking the third consecutive year at this rate. This follows the 8.25% rate set in February of the previous year for 2024-25, which itself was slightly higher than the 8.15% rate offered during the 2022-23 financial year.

The Central Board of Trustees (CBT) has also approved a one-time Amnesty Scheme. This initiative addresses compliance hurdles for income tax-recognized trusts that are not yet covered under—or exempted from—the EPF and MP Act, 1952, while also aligning with the provisions of the Finance Act, 2026. The objective of this six-month program is to bring trusts within the regulatory framework to safeguard the interests of employees.

It offers waivers on fines, interest, and damages to those trusts that either meet or exceed statutory requirements regarding the benefits provided. Furthermore, under specific conditions, this scheme permits retrospective exemptions, thereby ensuring that all eligible employees receive their statutory benefits. This applies specifically to exempted establishments that have complied with the EPF and MP Act, 1952.

**Approval of SOPs**

To further streamline operations, the CBT has approved a simplified ‘Standard Operating Procedure’ (SOP) for EPF exemptions. This new framework consolidates the ‘Exemption Manual’ and four existing SOPs into a single, comprehensive document designed to reduce the burden of regulatory compliance. Additionally, the updated SOP introduces a fully digital process for the withdrawal and transfer of past accumulations. Finally, the CBT has approved the notification of new social security schemes under the ‘Code on Social Security, 2020,’ to facilitate a seamless transition from the existing regulatory framework to the new one.

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