EPFO Panel Approves New SOP for Exempted Establishments; CBT Decision Awaited

The Employees’ Provident Fund Organisation’s (EPFO) Exempted Establishment Committee (EEC) has cleared a revised standard operating procedure (SOP) for exempted establishments. The proposal was approved at the committee’s 60th meeting held on 20 February, as per The Business Standard report. 

The SOP has been recommended to the Central Board of Trustees (CBT), EPFO’s apex decision-making body. A final decision is expected at the CBT meeting scheduled for 2 March.  

The EEC is a sub-committee of the CBT that reviews matters relating to exempted establishments. 

Consolidation of Existing Procedures 

The proposed SOP brings together four existing operating procedures and one manual into a single framework. The aim is to create a uniform reference for compliance and regulatory processes.  

It also allows for updates in line with provisions under the Code on Social Security, 2020, subject to approval by the Central Provident Fund Commissioner (CPFC). 

A committee comprising CBT members and officials from legal, exemption, investment and information divisions had been formed in April 2025 to review the framework. 

Change in Audit Mechanism 

Currently, EPFO officers conduct annual physical inspections of exempted establishments. The new SOP proposes replacing this with a risk-based online audit system.  

It also introduces third-party audits by Chartered Accountant firms empanelled with the Comptroller and Auditor General of India (CAG). 

The shift is expected to bring audit processes onto digital platforms and standardise oversight. 

Online Processes and Compliance 

The framework includes a provision for online surrender of exemption. In such cases, past accumulations would be transferred through internet banking. 

Each exempted establishment will also have access to an online grievance portal integrated with EPFO’s public grievance system. Balances in inoperative and non-KYC accounts would be transferred to EPFO along with accrued interest. 

Scope of Exempted Establishments 

Exempted establishments are companies allowed to manage provident fund trusts internally, provided they offer benefits at least equal to statutory EPFO schemes under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. 

While fund management rests with employer-run trusts, EPFO continues to regulate and audit them. 

Read More: EPFO Likely to Keep FY26 Interest Rate Unchanged At 8.25%! 

Conclusion 

The revised SOP introduces changes to audit practices, compliance processes and digital systems for exempted establishments. Its rollout will depend on approval by the Central Board of Trustees (CBT). 

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