The Employees’ Provident Fund Organization (EPFO) is mulling to introduce a new pension scheme for organized sector employees earning a basic salary of more than Rs 15,000 and not compulsorily covered under the Employees’ Pension Scheme-1995 (EPS-95).
At present, those employees in the organized sector whose basic pay (Basic Pay and Dearness Allowance) is up to Rs 15,000 are compulsorily covered under EPS-95.
According to a source, “There has been a demand for higher pension on higher contribution among EPFO members. Thus, it is being actively considered to bring a new pension product or scheme for those whose monthly basic salary is more than Rs 15,000.
New proposal may come on 11-12 March
According to the source, the proposal on this new pension product is likely to come up in the meeting of the Central Board of Trustees (CBT), the apex decision-making body of the EPFO, in Guwahati on March 11 and 12. During the meeting a sub-committee on pension related issues constituted by the CBT in November, 2021 will also submit its report.
Demand to raise the limit of basic salary to 25 thousand
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. As per industry estimates, the increase in pensionable wages could bring 50 lakh more workers in the organized sector under the EPS-95.
Former Labor Minister Bandaru Dattatreya had said much earlier in a written reply in Lok Sabha in December 2016, “Proposal to increase the wage ceiling for ‘coverage’ from Rs 15,000 per month to Rs 25,000 per month under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.” EPFO had introduced, but no decision has been taken on it.
The source said 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, as their monthly basic salary at the time of joining service is less than Rs 15,000. was excessive