The Employees' Provident Fund Organisation (EPFO) has introduced a revised regulatory framework for Exempted Provident Fund (PF) Trusts under the Employees' Provident Fund Scheme, 2026. The updated rules strengthen governance, digital compliance, audits, fund management, and member services for companies that manage provident fund contributions through their own approved in-house trusts instead of depositing them directly with EPFO.

The revised framework primarily affects employers operating exempted PF trusts, but employees covered under these trusts may also benefit from improved transparency, digital access, and stronger regulatory oversight.

Here's everything you need to know.

What Is an Exempted PF Trust?

Most employers deposit employees' provident fund contributions directly with EPFO.

However, certain large organizations receive government approval to operate their own Exempted PF Trusts, which manage provident fund contributions internally while complying with EPFO regulations.

These trusts:

• Collect both employer and employee PF contributions.

• Maintain members' provident fund accounts.

• Credit interest in accordance with applicable rules.

• Process withdrawals and transfers under prescribed regulations.

When an employee leaves such an organization, the provident fund balance can generally be transferred to another eligible EPF account, subject to the applicable procedures.

1. Benefits Must Match or Exceed EPFO Standards

One of the key provisions under the revised framework is that exempted PF trusts must continue providing benefits that are at least equivalent to those available under the EPF Scheme.

Failure to maintain comparable benefits could affect the trust's exempted status.

This requirement is intended to ensure that employees covered under private PF trusts do not receive lower benefits than EPFO subscribers.

2. Board of Trustees Becomes Mandatory

The revised rules require every exempted establishment to maintain a properly constituted Board of Trustees.

The Board will be responsible for:

• Administration of the provident fund.

• Protection of members' interests.

• Maintenance of records.

• Compliance with applicable regulations.

• Overall governance of the trust.

3. New Guidelines on Interest Rates

The revised framework also introduces provisions relating to the interest credited by exempted PF trusts.

According to the notified rules, the interest rate offered by an exempted trust cannot exceed the official interest rate declared by the Central Government by more than 200 basis points (2 percentage points).

The provision establishes a defined upper limit while ensuring consistency with the broader EPF framework.

4. Digital Records and Online Services Become Mandatory

The EPF Scheme, 2026 places significant emphasis on digital administration.

Exempted PF trusts are now expected to:

• Maintain electronic member records.

• Issue annual account statements.

• Enable online balance viewing.

• File electronic returns.

• Support electronic processing of withdrawals, advances, and transfers in accordance with EPFO procedures.

The move is expected to improve transparency and reduce manual processing.

5. Annual Audit Requirement

Every exempted PF trust must undergo a mandatory annual audit.

The audit is required to be conducted by a qualified Chartered Accountant to verify:

• Financial records.

• Fund management.

• Compliance with applicable regulations.

• Accuracy of member accounts.

The requirement is intended to strengthen financial accountability and improve governance standards.

6. Employer Responsibility Becomes Clearer

Under the revised framework, employers operating exempted PF trusts remain responsible for ensuring proper administration.

Their responsibilities include:

• Timely transfer of PF contributions.

• Compliance with statutory requirements.

• Meeting administrative expenses.

• Protecting members' interests.

• Compensating the trust for eligible losses where required under applicable provisions.

This reinforces employer accountability for the proper functioning of exempted trusts.

7. Exemption Will Not Be Permanent

Another significant change relates to the duration of exempted status.

Instead of continuing indefinitely, approval for exempted PF trusts will now be granted for a specified period.

Initially, exemption will generally remain valid for three years, after which renewal will depend on continued compliance with regulatory requirements.

Persistent violations or failure to meet prescribed standards may result in cancellation of exempted status.

What Does This Mean for Employees?

Employees whose PF is managed through an exempted trust are not required to take any immediate action.

However, they can expect improvements in areas such as:

• Better digital access to PF records.

• Stronger regulatory oversight.

• Greater transparency in fund management.

• More standardized compliance procedures.

• Enhanced governance of employer-managed PF trusts.

The revised EPF Scheme, 2026 is designed to modernize provident fund administration while ensuring that exempted trusts continue to provide benefits comparable to those available under the EPFO system. For employees, the updated framework is expected to improve accountability and strengthen confidence in employer-managed provident fund arrangements.