EPFO could bring new pension scheme for those earning more than Rs 15,000

February 20, 2022

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If you are employed in the organized sector and then this news might be beneficial for you. Employee Provident Fund Organization or EPFO for the employees of the organized sector getting basic wages of more than Rs 15,000 and not compulsorily covered under the Employee Pension Scheme-1995 (EPS-95) is considering bringing a new pension scheme.

At present, those employees of the organized sector whose basic salary (Basic Pay and DA) is up to Rs 15 thousand are compulsorily covered under EPS-95. A source told PTI, “There has been a demand among EPFO members for higher pension on higher contribution. 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.’

Decision may be taken in EPFO’s CBT meeting

According to the source, the proposal on this new pension product may 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.

The source said that there are EPFO subscribers who are getting a monthly basic salary of more than Rs 15,000, but they are able to contribute under EPS-95 only 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 September 1, 2014, due to wage revision and price hike in the organized sector. 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.