EPFO May Extend PF and Pension Benefits to Self-Employed and Gig Workers Under New Universal Scheme

New Delhi, July 17: The Employees’ Provident Fund Organisation (EPFO) is preparing a comprehensive framework to extend retirement savings and social security benefits to millions of self-employed individuals, gig workers, and unorganised sector employees. Under a proposed universal provident fund (PF) scheme, individuals currently outside the formal social security net will be allowed to voluntarily contribute a portion of their income toward a long-term retirement fund. The initiative aligns with broader legislative mandates to expand financial safety nets to India's rapidly growing informal and platform-based workforce.

Flexible Contribution and Accumulation Models

The accumulation phase of the proposed universal scheme is expected to mirror the core mechanism of the existing EPF framework, but with significantly enhanced transactional flexibility. To accommodate the irregular earnings patterns typical of freelancers, consultants, and delivery partners, subscribers will likely have the option to choose their contribution frequency, ranging from daily deposits to annual lump sums. EPFO Starts Crediting 8.25% Interest for FY 2025-26; Here's How Members Can Verify Their Balance.

The accumulated corpus will earn annual interest similar to standard EPF accounts. Furthermore, the plan considers matching the existing tax exemptions available under the regular EPF framework, which includes a complete tax exemption on annual contributions up to INR 2.5 lakh, alongside tax-free interest accrual.

Overhaul of the Withdrawal Phase

A key operational distinction under discussion involves a major revamp of the post-retirement withdrawal phase. Rather than mandating a single lump-sum withdrawal at retirement, the EPFO is exploring a mechanism inspired by the mutual fund industry's Systematic Withdrawal Plan (SWP). How EPFO’s Automatic PF Account Transfer Works Under the New CITES Platform.

This model would give subscribers the option to keep their corpus with the EPFO post-retirement while receiving flexible, periodic payouts tailored to their ongoing financial needs. According to senior officials, the agency is also considering extending this systematic withdrawal facility to existing formal-sector EPF subscribers to provide better long-term asset management.

Self-Funded Architecture and Global Precedents

Unlike existing government welfare plans like the Pradhan Mantri Shram Yogi Maandhan Yojana - where the Central Government matches the subscriber's pension contribution - the proposed universal PF model will operate as an entirely self-funded structure. It will require no direct budgetary support from the state.

To structure the basic operational guidelines, the EPFO has actively analyzed international retirement models, including Singapore’s Central Provident Fund (CPF) framework. While the Ministry of Labour and Employment has not yet issued a formal administrative mandate, the EPFO has proactively floated an independent tender to design and develop the advanced IT architecture required to support millions of decentralized accounts.

Expanding the Social Security Net

The proposal marks a fundamental shift from the traditional EPF mandate, which historically limited coverage to salaried employees in establishments with 20 or more workers. The push comes on the heels of the Code on Social Security, which empowers the government to establish comprehensive welfare, life insurance, and old-age protection frameworks for unorganised, gig, and digital platform workers.

By utilizing digital registries like the e-Shram portal to map the unorganised workforce, the proposed framework aims to seamlessly transition self-employed professionals and independent contractors into a structured, institutionalized retirement environment.