Union Minister Dr. Mansukh Mandaviya chaired the 237th meeting of the Central Board of Trustees (CBT), Employees' Provident Fund (EPF), in New Delhi on February 28, 2025. The board recommended an 8.25% interest rate on EPF accumulations for the financial year 2024-25, ensuring stable returns for millions of salaried individuals.
The recommended interest rate of 8.25% is expected to benefit EPF members by providing steady growth on their retirement savings. Once officially notified by the government, the Employees’ Provident Fund Organisation (EPFO) will credit the interest into members' accounts.
High Returns and Tax Benefits
EPF remains one of the most attractive investment options for salaried individuals, offering relatively high and stable returns compared to many other fixed-income instruments. Additionally, the interest earned on EPF deposits is tax-free (up to a specified limit), making it an efficient wealth-building tool for millions of employees across the nation. This recommendation reflects the confidence in EPFO’s strong credit profile and its consistent ability to deliver reliable returns to its members.
Major Reforms in Employees’ Deposit Linked Insurance (EDLI) Scheme
CBT also introduced key modifications in the Employees' Deposit Linked Insurance (EDLI) scheme to strengthen financial security for EPF members’ families. The enhancements include:
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Minimum Insurance Benefit for New Employees: A minimum life insurance benefit of Rs. 50,000 will now be provided for EPF members who die within one year of service. This change is expected to benefit over 5,000 families annually.
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Extended Coverage for Non-Contributory Period Deaths: If a member passes away within six months of their last contribution, EDLI benefits will still be applicable, provided their name remains on the employer’s rolls. This modification will benefit over 14,000 cases every year.
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Service Continuity Consideration: Previously, a break of even one or two days between jobs resulted in the denial of minimum insurance benefits (ranging from Rs. 2.5 lakh to Rs. 7 lakh). Now, a gap of up to two months between two employments will be considered as continuous service, ensuring more members qualify for EDLI benefits. This is expected to help over 1,000 cases annually.
Overall, these changes will lead to higher benefits in over 20,000 cases each year, providing greater financial protection to EPF members' families in distress.
CBT reviewed the progress of implementing the Supreme Court’s ruling on pension based on higher wages. EPFO has processed 72% of applications so far, working in mission mode to ensure the smooth execution of the decision, benefiting both pensioners and employers.
EPFO also implemented the Centralized Pension Payment System (CPPS) across all its Regional Offices, simplifying the disbursement process through a Centralized Pension Disbursement Account (CPDA) at the New Delhi Branch of SBI. In January 2025 alone, Rs. 1710 crore was disbursed to 69.35 lakh pensioners through this centralized system, significantly reducing pension-related grievances.
To reduce litigation, the Board discussed rationalizing the rate of damages for delayed PF remittances. The rate was earlier revised to 1% per month of delay for defaults occurring after June 2024. Additionally, a statutory mechanism for automatic abatement of cases upon the deposit of damages was proposed to further control litigation.
The CBT also approved the Revised Estimates for 2024-25 and the Budget Estimates for 2025-26 for EPFO and its administered schemes. This financial planning aims to strengthen the operational framework and ensure better service delivery to members.
The meeting was attended by Vice-Chairperson Sushri Shobha Karandlaje (Union Minister of State for Labour & Employment and MSME), Co-Vice-Chairperson Sumita Dawra (Labour & Employment Secretary), and Member Secretary Ramesh Krishnamurthi (Central PF Commissioner). Representatives from employers, employees, and senior officers from the Central Government and EPFO were also present during the meeting.
