EPFO contribution to surge 25 percent as wage ceiling is hiked to 25k - Latest Key Updates

The Employees Provident Fund Organisation (EPFO) has projected a massive increase in its total contributions for the financial year 2027-28. The wage ceiling has been revised from 15000 rupees to 25000 rupees, and this crucial change has come into effect from September 17. The 240th meeting of the Central Board of Trustees of EPFO is scheduled to be held on November 19. During this high-level meeting, the revised estimates for the financial year 2026-27 and the budget estimates for 2027-28 will be thoroughly considered and evaluated. The meeting agenda also includes a notable proposal to invest up to 3 percent of newly received funds into Alternative Investment Funds (AIFs).

Details on Wage Ceiling and Projected Contributions

80 lakh crore rupees. 75 lakh crore rupees, marking a significant 25 percent increase compared to the budget estimates of 2026-27. These projections have been formulated with utmost caution, while notably, these estimates don't include those employees whose monthly salary falls between 15001 rupees and 25000 rupees and who currently don't fall under the direct purview of this scheme. The report further points out that the hike in the salary limit will lead to a potential rise in the total number of members, which could subsequently generate additional contributions. However, this potential extra contribution has deliberately not been factored into the revised estimates for 2026-27 and budget estimates for 2027-28. It was explicitly stated that these estimates were kept cautious to ensure that the budgetary figures remain realistic and don't overshoot actual real receipts.

Investment in Startups and Alternative Investment Funds

At present, more than 1850 AIFs are registered with the Securities and Exchange Board of India (SEBI). 53 lakh crore rupees. 0 scheme. This investment will strictly adhere to the conditions laid down under the pattern of investment framework, while 0 scheme, provided the overall investment ceiling doesn't exceed 5 percent of the total corpus.

Status Quo on ETF Unit Redemptions

The EPFO board will also seek formal approval to maintain status quo regarding the redemption of Exchange-Traded Fund (ETF) units during the current financial year, as the predefined criteria outlined in its redemption policy have not been met. No ETF units have been redeemed during the ongoing financial year. The primary reason behind this is that the holding-period return has not surpassed the average five-year return of the past 10 years, which serves as a mandatory prerequisite under the existing policy guidelines. All these comprehensive proposals and financial estimates will be taken up for detailed discussion during the forthcoming meeting of the Central Board of Trustees on November 19.