Trade unions criticize new EPF and EPS rules for neglecting demands for increased minimum pension and clarity on higher pensions.
New Delhi, India Jul 3, 2026 ALN: The Union Labour Ministry published on June 29 and 30 the Rules for the Employees’ Provident Fund (EPF) Scheme, 2026, the Employees’ Pension Scheme (EPS), 2026, and the Employees’ Deposit Linked Insurance (EDLI) Scheme, 2026, replacing the old Rules of 1952. These schemes impact millions of workers across the country. The EPF and EPS are pivotal in ensuring financial security for employees post-retirement, while the EDLI Scheme provides insurance benefits to the families of workers in case of their untimely demise.
The new Rules were necessitated by the implementation of the Code on Social Security in November 2025, which aimed to consolidate various labor laws into a more coherent framework. The Central Board of Trustees (CBT), which is responsible for overseeing the EPF and EPS, approved the draft Rules during its 239th meeting on March 2, 2026. This meeting was crucial as it represented a significant step towards modernizing the social security framework in India, which has not seen major reforms in decades.
The Ministry informed the CBT that the notification of the new schemes would provide a legally sound framework under the Code, facilitating the incorporation of previously approved reforms. This was seen as a necessary move to align scheme provisions with the Code, eliminate ambiguity during the transition phase, and ensure continuity and stability in the administration of social security benefits. The government emphasized that these reforms were essential to adapt to the changing economic landscape and the needs of the workforce.
However, trade unions have expressed dissatisfaction, claiming that the notification fails to address key demands, such as an increase in the minimum pension and clarity regarding higher pensions for applicants. This dissatisfaction highlights a significant gap between governmental reforms and the expectations of workers and their representatives. Trade unions argue that the reforms do not adequately address the financial challenges faced by retirees, particularly those who depend heavily on minimum pension payouts.
To align the application of the EPF Scheme with the Code, the Rule was amended to apply to every establishment covered under Chapter III of the Code, including those under the control of the Central or State government. This broadening of the scope is significant as it aims to include a wider range of workers under the protective umbrella of the EPF, thus enhancing their financial security. The new Rule has also redefined exempted establishments and “inter worker,” which could potentially lead to more workers being brought under the ambit of the EPF.
In the EPS Rules, the previous provision stated that if a member's pay exceeded ₹15,000 per month, the contribution for pension payable by the employer and the Central government would be limited to the amount payable on the employee’s pay of ₹15,000 only. The new Rule amends this to indicate that if the member's wage exceeds the wage ceiling notified by the Central Government, contributions will be limited to wages up to that ceiling. This suggests that the government may consider revising the wage ceiling for pensions, a demand supported by trade unions. The revision of the wage ceiling is crucial because it directly affects the pension amounts that workers receive upon retirement. Trade unions have long advocated for this change, arguing that the current ceiling does not reflect the rising cost of living and inflation.
There is a minor amendment regarding disbursing agencies of pensions, which were previously limited to post offices, banks, treasuries, and scheduled commercial banks, including regional rural banks and cooperative banks. The government anticipates that new types of disbursing agencies may emerge in the future. This flexibility in disbursing agencies could potentially streamline the process of pension distribution and make it more accessible for beneficiaries. By allowing for a broader range of agencies to handle disbursement, the government aims to improve efficiency and reduce delays in pension payments.
In the EDLI Scheme Rules, the Centre has added definitions for terms such as ‘insurance service provider’, ‘insurance policy’, ‘commissioner’, ‘member’, and ‘nominee’. A new provision mandates that the CBT appoint a valuer for the valuation of the insurance fund every three years, with the report to be presented before the CBT. This new requirement for regular valuations is significant as it aims to ensure the financial health of the insurance fund, which is crucial for the sustainability of the EDLI Scheme. Regular assessments will help in making informed decisions regarding the fund's management and the benefits it can provide to beneficiaries.
R. Karumalaiyan, a leader from the Centre of Indian Trade Unions and a worker’s representative in the CBT, criticized the amendments as cosmetic. He stated that the long-standing demands for increasing the minimum pension and addressing issues related to the distribution of higher pensions were overlooked by the government. “The government ignored these demands. Also, the ceiling for pension, which was fixed in 2014, should have been changed. That also is not done in the Rules. This is highly disappointing,” he remarked. His comments reflect a broader sentiment within the labor community that the government's efforts, while well-intentioned, do not go far enough in addressing the real financial needs of workers.
In conclusion, while the new EPF and EPS rules aim to provide a structured framework under the Code on Social Security, the lack of attention to critical demands from trade unions raises concerns about the adequacy of support for workers relying on these pension schemes. The ongoing dialogue between the government and trade unions will be crucial in shaping the future of these schemes. As the labor landscape continues to evolve, it is essential for the government to engage with stakeholders to ensure that the needs of workers are adequately met. The implications of these reforms will be significant, not only for current workers but also for future generations who will depend on these social security measures for their financial well-being.
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