To modernize its digital framework and ways of working, the Employees’ Provident Fund Organization launched the EPFO 3.0 initiative in 2025. Recently, Minister of State for Labor and Employment Shobha Karandlaje informed the Lok Sabha about the progress of auto-claim settlement, Centralized Pension Payment System (CPPS), and other important reforms implemented under this project. EPFO 3.0 is a complete digital transformation of the IT structure of the retirement fund, which is expected to be fully implemented by mid-2026.
EPF withdrawal through UPI
For years, the organization had been facing system-related disruptions to IT and service. To address these, the Central Board of Trustees (CBT) approved this reform package to be implemented in 2025. CBT is the biggest decision making body of EPFO. While progress is being made steadily, many envisioned features — such as EPF withdrawal through Unified Payments Interface (UPI) — are yet to be implemented. The purpose of these updates is to simplify EPFO services and significantly improve the user experience for members.
CPPS: New Payment System
Karandlaje confirmed that from January 1, 2025, every EPFO office has moved to CPPS, and is using a new payment system to speed up pension disbursement. This centralized system is currently providing assistance to approximately seven million (70 lakh) beneficiaries. The minister said that more than 70 percent of advance withdrawal requests, whose total amount is approximately Rs 51,620 crore, have been successfully resolved.
auto-settlement
The auto-settlement mode has processed 3,52,20,199 claims for amounts up to Rs 5 lakh during FY 2025-26, till February 25, 2026. The special thing is that EPFO increased the auto-settlement limit from Rs 1 lakh to Rs 5 lakh in June 2025, so that human intervention can be reduced and the time taken in processing can be reduced. This automated method has also been included in account transfer. As of February 25, 2026, more than seven million (7,054,895) transfer claims were completed without interference from employees or owners.
This is a big change from the previous system, where it was necessary to manually transfer the PF account on changing jobs. The minister had said that for accounts following KYC (Know Your Customer) norms, the requirement of approval from any employer, previous or existing, on transfer claims has been done away with. As of February 25, 2026, employees had submitted 21,39,247 transfer claims without any interference from their employers.
Interest rate on PF deposits fixed at 8.25 percent
According to the Labor Ministry’s March announcement, EPFO has maintained the interest rate on Employees’ Provident Fund (EPF) deposits at 8.25 per cent for the third consecutive year, for the period 2025-26. This comes after the 8.25 percent rate fixed for 2024-25 in February last year, which itself is slightly higher than the 8.15 percent rate given during the 2022-23 financial year.
The Central Board of Trustees (CBT) has also approved the one-time amnesty scheme. This initiative removes hurdles in compliance for income tax-recognized trusts that are not yet incorporated or exempted under the EPF and MP Act, 1952, and is also in line with the Finance Act, 2026. The objective of this six-month program is to bring the trusts within the ambit of the rules so that the interests of the employees can be protected.
It exempts trusts from penalties, interest and damages that provide profits that meet or exceed legal requirements. Additionally, the scheme allows retrospective relaxation under certain conditions, thereby ensuring that all eligible employees receive their statutory benefits. This applies specifically to exempted institutions that have complied with the EPF and MP Act, 1952.
SOP also approved
To further ease the functioning, CBT has approved a simple ‘Standard Operating Procedure’ (SOP) for EPF exemption. This new framework combines the Exemption Manual and four existing SOPs into a single comprehensive document, designed to reduce the burden of compliance. Additionally, a fully digital process for refunding and transferring previous deposits has been introduced in the updated SOP. Finally, the CBT has approved the notification of new social security schemes under the ‘Social Security Code, 2020’ to ease the transition from the existing regulatory framework to the new one.