From EPFO 3.0 reforms to hike in health insurance premiums: Key Lok Sabha takeaways

The government told the Lok Sabha that EPFO 3.0 will simplify provident fund services and speed up claim settlements

• EPFO 3.0 reforms speed up claims and pension payments.
• Minimum EPS pension remains Rs 1,000 per month.
• Health insurance premiums may rise for multiple reasons.

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During Question Hour on March 16, the Lok Sabha discussed several issues with direct implications for individuals’ personal finances and taxpayers.

The Centre clarified on several topics, ranging from the rollout of EPFO 3.0 and faster claim settlements to the factors behind rising health insurance premiums, as well as the government’s efforts to tighten asset valuation norms and accelerate loan recovery processes.

Here are the key takeaways from the starred and unstarred questions addressed in Parliament today.

EPFO 3.0 reforms speed up claims and pension payments, govt tells Lok Sabha

The government told the Lok Sabha that EPFO 3.0 will simplify provident fund services and speed up claim settlements. Under the reforms, the Centralised Pension Payment System (CPPS), launched in January 2025, enables faster pension disbursement to over 70 lakh pensioners through any scheduled bank branch. The auto-claim settlement limit has been raised from Rs 1 lakh to Rs 5 lakh, and over 3.52 crore claims have been processed digitally so far this financial year. The government also simplified PF account transfers during job changes, triggering over 70 lakh automatic transfers.

Minimum EPS pension remains Rs 1,000; govt processes higher pension applications

The government told the Lok Sabha that the minimum pension under the Employees’ Pension Scheme (EPS-95) continues at Rs 1,000 per month, supported through budgetary assistance. The scheme is funded through 8.33 percent employer contribution and 1.16 percent contribution from the central government on wages up to Rs 15,000. EPFO provided an online facility for joint option submissions, receiving about 15.24 lakh applications by January 31, 2025. As of March 2026, over 99.2 percent of applications have been processed.

Tax exemption on disability pension retained for armed forces personnel invalided out of service

The government told the Lok Sabha that income tax exemption on disability pensions for armed forces personnel invalided out of service continues under the Income-tax Act, 2025, maintaining the same scope as earlier provisions under the Income-tax Act, 1961 and the 1922 framework. The exemption applies to personnel whose disabilities are attributable to or aggravated by military service and who are invalided out of service.

Health insurance premiums may rise for several reasons, not just medical inflation

The government informed the Lok Sabha that the IRDAI has not conducted a specific study linking medical inflation directly to rising health insurance premiums. The Finance Ministry said health premiums may increase due to several factors, such as ageing policyholders, higher coverage or sum insured, and the addition of new policy features or benefits. IRDAI requires insurers’ appointed actuaries to periodically review premium revisions based on risk experience. The regulator has also capped annual premium increases for senior citizens at 10 percent, unless prior approval is obtained.

Govt pushes stricter asset valuation and faster loan recovery through stronger DRT framework

The government told the Lok Sabha that banks must follow stricter norms for valuing mortgaged assets before loan approvals, including independent valuation and title checks. For high-value properties, at least two valuation reports are required. To speed up loan recovery, borrowers appealing before DRAT must deposit part of the outstanding debt. The government has also introduced mandatory e-auctions, digital case filing, and the BAANKNET platform to improve transparency and strengthen Debt Recovery Tribunals.

40 cases of missing locker valuables reported in PSBs in five years: Govt

The government informed Parliament that 40 instances of valuables going missing from bank lockers in public sector banks were reported between FY21 and FY25, with compensation of about Rs 5.93 crore paid to affected customers. It clarified that the RBI does not maintain centralised data on such complaints. To improve safety, RBI issued revised bank locker guidelines in 2021. Banks are also required to maintain insurance and robust security systems to protect locker contents and maintain depositor confidence.