Retirement fund physique EPFO is mulling a brand new pension product for organized sector employees who’re getting fundamental wages of greater than Rs 15,000 per 30 days and should not mandatedily coated underneath its Employees’ Pension Scheme 1995 (EPS-95).
At current, all these staff within the organized sector whose fundamental wage (fundamental pay plus dearness allowance) is as much as Rs 15,000 per 30 days on the time of becoming a member of service are mandatedly coated underneath EPS-95.
“There has been demand for higher pension on higher contributions among the members of the Employees’ Provident Fund Organization (EPFO). Thus, it is under active consideration to bring out a new pension product or scheme for those whose monthly basic wages are more than Rs 15,000,” a supply aware of the event informed PTI,
As per the supply, the proposal on this new pension product may come up for dialogue within the assembly of EPFO’s apex resolution making physique Central Board of Trustees (CBT) on March 11 and 12 at Guwahati.
During the meet, a sub-committee constituted by the CBT on pension associated points in November 2021 would additionally submit its report.
The supply defined that there are EPFO subscribers who’re getting greater than Rs 15,000 month-to-month fundamental wages who’re pressured to contribute decrease (on the price of 8.33 per cent of Rs 15,000 per 30 days into EPS-95) and thus they get decrease pension.
The EPFO had amended the scheme in 2014 to cap month-to-month pensionable fundamental wages to Rs 15,000.
The threshold of Rs 15,000 applies solely on the time of becoming a member of service. It was revised upward from Rs 6,500 from September 1, 2014 in view of worth rise and pay revisions within the formal sector.
Later, there have been calls for and deliberations to boost the edge month-to-month fundamental wage to Rs 25,000, however the proposal was not permitted.
As per business estimates, elevating pensionable pay may have introduced 50 lakh extra formal sector employees underneath the ambit of EPS-95.
“A proposal for increase in the wage ceiling from Rs 15,000 per month to Rs 25,000 per month for coverage under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 has been submitted by the Employees’ Provident Fund Organization (EPFO). No decision in this regard has been taken,” former labor minister Bandaru Dattatreya had acknowledged in a written reply within the Lok Sabha in December 2016.
The supply mentioned there’s a want for a brand new pension product for individuals who are both pressured to contribute decrease or who couldn’t subscribe to the scheme as their month-to-month fundamental wages have been greater than Rs 15,000 on the time of becoming a member of service.
The supply added that there is no such thing as a transfer to hike the pensionable wage cap by the EPFO within the quick future and in that situation, the physique has to consider giving protection to these formal sector employees who’re excluded from the EPS-95 resulting from greater fundamental wages.
The matter of pensionable wage cap can be sub-judice within the Supreme Court. In 2014, Kerala High Court allowed the workers to contribute into the EPS-95 on the premise of the particular fundamental wages drawn by them.
In April 2019, the apex courtroom had dismissed a particular go away petition filed by the EPFO in opposition to the Kerala High Court judgment. In January 2021, the apex courtroom recalled the dismissal order within the evaluate petitions filed by EPFO.
In February, 2021, the apex courtroom restrained the excessive courts of Kerala, Delhi and Rajasthan from initiating contempt proceedings in opposition to the Center and EPFO over non-implementation of their verdicts.
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With inputs from TheIndianEXPRESS
