EPFO: No Change in Wage Ceiling, No New Higher Pension Window

The Employees’ Provident Fund Organisation (EPFO) has clarified that the proposed EPF Scheme, 2026, does not reduce employees’ social security benefits and largely retains the key provisions of the existing provident fund framework.

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Addressing concerns raised by trade unions over the Social Security Code and the newly drafted EPFO schemes, EPFO Chief Executive Officer Ramesh Krishnamurthi said the new scheme is focused on continuity and does not alter the core structure of provident fund contributions.

No Change in PF Contributions or Wage Ceiling

Krishnamurthi said the existing 12% provident fund contribution by both employers and employees remains unchanged. He also confirmed that the current ₹15,000 monthly wage ceiling, notified in 2014, continues to apply.

The contributions remain at 12%. The wage ceiling as of now is also as per the earlier wage ceiling notified in 2014, which is ₹15,000. Earlier also this concept of voluntary PF contributions existed. Irrespective of the wage or the salary, most employers used to offer provident fund as 12% of your wages. It’s not a new provision. There’s nothing which has changed. It’s always existed,” said Ramesh Krishnamurthi, CEO, EPFO

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Responding to concerns that employers may limit their contributions to the statutory minimum under the new framework, he expressed confidence that most organisations would continue with their existing employment practices.

PF is one of the best avenues for retirement savings. Most employers are not going to change their entire contractual terms because the new scheme has now come. However, if any new employer or employee wants a different approach, the scheme provides that flexibility,” he added

Social Security Code Expands Coverage

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The EPFO CEO said the Code on Social Security introduces a harmonised definition of wages and aims to expand social security coverage to unorganised workers as well as gig and platform workers.

Also Read: Global Layoffs Reach Indian Shores: Will Severance Match the U.S.?

He also noted that the Code gives the government the flexibility to revise the wage ceiling in the future.

As far as minimum pension and wage ceiling are concerned, these are policy decisions determined by the government based on budgetary support,” he said

No Plans to Reopen Higher Pension Window

Krishnamurthi also ruled out reopening the window for higher pension under the Employees’ Pension Scheme (EPS), saying the pension fund is a pooled corpus that must remain financially sustainable.

According to him, EPFO has already processed nearly all higher pension applications and issued around 4.4 lakh demand letters.

Every payout for a member earning higher pension is costing the pension fund nearly ₹25 lakh. It is a defined benefit scheme and the money comes from the same pooled fund. If that corpus is exhausted for a few members today, it will affect future retirees. It cannot become a Ponzi scheme,” he said

He added that there is currently no proposal to extend the higher pension application window.

Focus on Long-Term Sustainability

Explaining the rationale, the EPFO CEO said the Employees’ Pension Scheme is primarily designed to provide retirement security to lower-income workers in the formal sector.

EPS is meant for the poorer sections of formal sector workers. There is a mistaken apprehension that there is a lot of money in the fund. Higher pension for a few people could reduce the retirement corpus available for many others,” he said

The clarification comes as trade unions have raised concerns that the implementation of the Social Security Code and the proposed EPFO schemes could weaken existing social security benefits. EPFO, however, maintains that the new framework preserves existing provident fund provisions while expanding coverage to more categories of workers.

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