Technology must be backed by process reforms: EPFO CEO

There is an argument, often described as techno-solutionism, that technology is the answer to every problem. Whether it is question of paper leaks or issues in EPFO management, we are repeatedly told that technology will bring transparency. What are your views on this? How has your background in technology helped you steer the EPFO and undertake major reforms, including the revamp of the income tax system?

Technology is not a solution in itself; it is an enabler. Any technological intervention must be supported by changes in processes and the legal framework. EPFO settled nearly six crore claims in 2024-25 and 8.3 crore in 2025-26 — a 30-35% increase with almost the same manpower. We expect to settle nearly 10 crore claims this year. Is it sustainable? No. One major problem was our decentralised database. Each of the 123 Regional Offices maintained its own database. We have now centralised them into a single database. While members continue to have multiple member IDs, all are now linked under one Universal Account Number (UAN) in one database. It has become easy for us to identify your total balance and complete service history.

The second challenge was that the claim withdrawal process was based on a legal framework which had different periods of eligibility. The amount that you could withdraw would vary based on your kind of need. We simplified both the legal framework and the process. There is now a uniform eligibility period of 12 months for all claim categories. We have also merged the employee’s and employer’s shares for withdrawal purposes, since the entire amount belongs to the member. Withdrawal eligibility has been simplified to either 75% of the total balance or 100% of the eligible balance after accounting for the minimum balance requirement. Members may withdraw the amount in one instalment or in multiple withdrawals, without restrictions. These reforms required changes to both the process and the legal provisions governing the scheme. The simplified withdrawal rules have now been incorporated into the EPFO software. Simplicity, I believe, is the key.

What are the biggest shifts in EPFO’s service? Is EPFO being transformed into a fully digital, paperless and member-centric organisation?

The credit for this transformation goes entirely to our Minister of Labour and Employment, Mansukh Mandaviyaji. His first instruction to us was to simplify the process. Around 80-85% of our members are blue-collar workers earning PF wages of about ₹15,000. They include security guards, data entry operators and sales representatives. His direction was clear: make it easy for them to access their own money. We have introduced a large number of simplifications. If your UAN is linked to Aadhaar and your KYC is complete, we trust the information you have provided. Bank account validation is carried out through the National Payments Corporation of India in coordination with the concerned bank. We have increased the auto-settlement limit from ₹1 lakh to ₹5 lakh.

Earlier, many claims were rejected because members were unaware of the amount they were eligible to withdraw. We have moved those validations to the submission stage, so eligibility is verified upfront. As a result, rejections have become negligible. Once your KYC is complete, we process the settlement without unnecessary hurdles. We have also introduced auto-settlement for final withdrawals and auto-approval of transfers. If your employment records, KYC details and personal particulars are in order, your PF balance is transferred automatically from your previous account. You no longer need to submit a transfer request or obtain approvals.

The Labour Codes have now been implemented, and the rules have also been notified. One concern, particularly among trade unions, is that the codes could narrow the scope of social security. There have also been reports that employers’ contributions to the PF may be reduced or kept at the minimum level. How do you respond to these concerns?

I would like to take this opportunity to allay those apprehensions. The EPF Scheme, 2026, is based on continuity. The 1952 scheme has been in force for more than seven decades, and we have not tried to touch that part. The contribution rate remains 12%, and the wage ceiling continues to be ₹15,000, as notified in 2014. The option of making voluntary PF contributions has always existed. Irrespective of the wage ceiling, many employers have continued to contribute 12% of employees’ wages towards the PF. Nothing has changed in that regard. The new scheme does provide flexibility for employers and employees who wish to adopt a different approach, but most employers are not going to change their entire contractual terms simply because the new scheme has come into force.

The Social Security Code also introduces a harmonised definition of wages and expands social security coverage to workers in the unorganised sector, as well as gig and platform workers. The EPFO today offers flexible retirement planning, competitive and compounded returns and greater convenience. Employer contributions of up to ₹7.5 lakh are exempt from tax and are not treated as part of an employee’s taxable salary. The interest earned is also tax-exempt. So, why will you not save through PF? This is the best way to save for your retirement.

Are there any plans to enhance benefits such as death insurance, the minimum pension or the wage ceiling?

The Code on Social Security gives the government the flexibility to revise the wage ceiling. As far as the EDLI scheme is concerned, we increased the minimum payout to ₹50,000 last year. Decisions on the minimum pension and the wage ceiling are policy matters that depend on budgetary support. Those are decisions for the government to take.

Will the EPFO reopen the window for higher pension?

The Employees’ Pension Scheme is a pooled fund built from the contributions of all its members. At present, membership is capped at a wage ceiling of ₹15,000. The idea was to provide a basic pension safety net for blue-collar workers and those at the lower rung of the formal sector. The scheme combines defined contributions with defined benefits. Of the employer’s 12% contribution, 8.33% is diverted to the pension scheme, while the government contributes 1.16%. Pension is then paid according to a prescribed formula.

In 2022, the Supreme Court allowed a one-time window of four months for eligible employees to opt for a higher pension. We have processed almost all the applications received under that order and issued nearly 4.4 lakh demand letters. Every higher pension payout places an additional liability of nearly ₹25 lakh on the pension fund. It’s a defined benefit scheme and the money comes out from the same pool. If I drain that corpus to provide higher pensions to a limited group today, what will happen when the current members retire? The sustainability of the fund is therefore critical. We have completed the exercise directed by the Supreme Court, and there is no proposal to reopen the window. EPS is intended to provide a basic pension to poorer sections in the formal sector. I can’t rob Peter to pay Paul. There is a misconception that the fund has unlimited resources. Your drawing higher pension out of this is going to deprive 10 or 20 people whose retirement depends on the same corpus.

Question from social media: How far is the EPFO justified in citing financial non-viability while extending pension on higher wages to employees of exempted establishments?

The Supreme Court’s judgment was limited in scope. It merely granted an additional four-month window to employees who were otherwise eligible but were not contributed. Eligibility was determined on that basis. Our circular of January 18, 2025, made it clear that the employer has an equal stake in determining whether contributions should be made on higher wages.

Question from social media: If an establishment is already contributing to the PF beyond the wage ceiling, will members have to submit a fresh digital declaration under the codes?

No. If an employer is already contributing to the PF on higher wages, that arrangement can continue. No separate declaration is required under the new scheme. The flexibility to reduce or increase contributions rests with the employer and the employee. It is a matter to be decided between them, without any additional consent, approval or declaration under the scheme.

Aroon Deep: Financial fraud targeting senior citizens has been on the rise. How is the EPFO addressing such fraud?

When a pension payment order is issued, we complete all due diligence to verify the pensioner’s identity. The bank account into which the pension is credited is also verified with the concerned bank. Unless there is collusion at the banking level, it is difficult for the money to be diverted to another account. In addition, pensioners need to submit a Digital Life Certificate every year through Jeevan Pramaan. We are also moving to an Aadhaar-enabled payment bridge system and have introduced a doorstep Jeevan Pramaan service through the Department of Posts.

T.C.A. Sharad Raghavan: Do you think PF coverage should be extended to gig and platform workers?

Of the total working population of India, which is estimated at 60 to 65 crore, the formal sector covers only 15 crore. The rest work in the informal sector and need the protection of a social security safety net. ILO (International Labour Organization) Convention 102 identifies nine branches of social security, including sickness, health care, children’s education and old age protection. The Social Security Code enables such benefits to be delivered through either Ayushman Bharat, ESIC (Employees’ State Insurance Corporation) and the EPFO. The government is working on the modalities of a scheme. The idea is to make it contributory or co-contributory.

Sreeparna Chakrabarty: INTUC (Indian National Trade Union Congress), the country’s second-largest trade union, has not been represented on the EPFO’s Central Board of Trustees for several years. What is the reason?

INTUC has had multiple factions, and that is probably the reason. As far as the EPFO board is concerned, nominations are made by the Ministry of Labour and Employment, which decides which trade unions are recognised and represented on the board.

Devesh K. Pandey: You spoke about KYC and automation. Do you mean that the problems members faced with errors in names, their father’s name and other personal details have now been taken care of?

The concept of a UAN came only in 2014 and Aadhaar was linked to it in 2017. Since last year, we have made the UAN generation or allotment based on Aadhaar facial authentication. We have given full power to the employees.