EPFO is considering to bring a new pension scheme for organized sector employees who are getting basic salary of more than Rs 15,000 per month and are not covered under its Employees Pension Scheme 1995 (EPS-95). .
EPFO is contemplating to bring a new pension scheme for organized sector employees.
retirement fund organization EPFO New Pension Scheme for Organized Sector Employees (Pension Scheme) Is considering to bring, those who have a basic salary of more than Rs 15,000 per month (Basic Salary) and he is getting his Employees Pension Scheme 1995 (EPS-95) are not covered under At present, all those employees working in the organized sector whose basic pay (Basic Pay plus Dearness Allowance) is up to Rs 15,000 per month at the time of joining the service are mandatorily covered under EPS-95 .
According to a PTI report, a source with knowledge of the matter told him that there is a demand among the members of Employees’ Provident Fund Organization (EPFO) for more pension on higher contribution. Therefore, it is being vigorously considered that a new pension scheme or product should be introduced for those people whose monthly basic salary is more than Rs 15,000.
Discussion on the proposal will be held in March
According to the report, the proposal on the new pension product can be discussed in the meeting of the Central Body of Trustees (CBT), the main decision-making body of the EPFO, on March 11 and 12 in Guwahati.
During the meeting, a sub-committee on pension related issues constituted by the CBT in November, 2021 will also submit its report. It has been said in the report that there are EPFO subscribers who are getting monthly basic salary of more than Rs 15,000, but they are able to contribute under EPS-95 at a lower rate of 8.33 per cent. In this way they get less pension. The EPFO had amended the scheme in 2014 to limit the monthly pensionable basic pay to Rs 15,000. The limit of Rs 15,000 is applicable only at the time of joining the service. It was revised upwards from Rs 6,500 with effect from 1st September 2014 due to wage revision and price hike in the organized sector.
Demand to increase the limit of monthly basic pay
Later there was a demand to increase the monthly basic salary limit to Rs 25,000 and it was discussed, but the proposal could not be approved. According to industry estimates, 50 lakh more workers in the organized sector could come under the ambit of EPS-95 by raising the pensionable salary.
Former Labor Minister Bandaru Dattatreya had said in a written reply in Lok Sabha in December 2016 that the EPFO has proposed to increase the wage ceiling from Rs 15,000 per month to Rs 25,000 per month for coverage under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. But no decision had been taken on it. The report said that there is a need for a new pension product for those who are either forced to contribute less or who could not subscribe to the scheme because their monthly basic salary at the time of joining service 15,000 was more than Rs.