EPFO total contributions expected to rise by 25% in 2027-28 due to wage ceiling increase

New Delhi: The Employees' Provident Fund Organisation (EPFO) could see its total contributions rise by 25% in 2027-28 following the increase in the wage ceiling to ₹25,000 from ₹15,000, effective September 17.

The 240th meeting of EPFO's central board of trustees, scheduled for November 19, will consider the revised estimate for 2026-27 and the budget estimate for 2027-28. The agenda also includes a proposal to invest up to 3% of fresh accretion in alternative investment funds (AIFs), subject to the overall investment ceiling of 5%, either directly or through the Startup India Fund of Funds 2.0 scheme.

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According to the agenda, reviewed by ET, total contributions in 2026-27 are estimated at ₹4.12 lakh crore, against the budgeted ₹3.80 lakh crore, an increase of 8.37%. Contributions for 2027-28 are budgeted at ₹4.75 lakh crore, 25% higher than the BE for 2026-27.

However, these are conservative estimates as they do not account for employees earning monthly wages between ₹15,001 and ₹25,000 who are not currently covered by the scheme. "Accordingly, no indicative projection of additional contribution receipts on account of the likely increase in membership consequent upon the enhancement of the wage ceiling has been factored into RE 2026-27 and BE 2027-28," it said.

"The estimates have, therefore, been projected on a conservative basis to ensure that the budgetary projections remain realistic and do not exceed the likely actual receipts," it added.

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Investment in Startups

More than 1,850 AIFs are currently registered with the Securities and Exchange Board of India (Sebi). As of June 30, 2026, ₹7.10 lakh crore had been invested in AIFs, against ₹7.58 lakh crore raised and ₹17.53 lakh crore committed.

"Investments may be permitted in the AIFs managed directly by the National Investment and Infrastructure Fund (NIIF), and through Startup India Fund of Funds 2.0 scheme managed by Sidbi in accordance with the applicable conditions under the Pattern of Investment," it said in its proposal.

EPFO will also seek the board's approval to maintain the status quo on the non-redemption of exchange-traded fund (ETF) units during the current financial year, as the criteria specified under its redemption policy have not been met.

No ETF redemption has taken place during the current financial year, primarily because holding-period returns have not exceeded the average five-year returns over the past 10 years, as required under the policy.