The Employees’ Provident Fund Organisation is planning to introduce a new pension product for organised sector workers who get basic wages of more than Rs. 15,000 a month and are not mandatorily covered under its Employees’ Pension Scheme 1995 (EPS-95).
At present, all those employees in the organised sector whose basic wage (basic pay plus dearness allowance) is up to Rs. 15,000 a month at the time of joining service are mandatorily covered under EPS-95.
“There has been demand for higher pension on higher contributions among the members of the Employees’ Provident Fund Organisation (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 source privy to the development said. The proposal on this new pension product could come up for discussion at the meeting of the EPFO’s apex decision-making body, Central Board of Trustees (CBT), in Guwahati on March 11 and 12.
During the meeting, a sub-committee constituted by the Central Board of Trustees on pension-related issues in November 2021 would also submit its report.
The source said there were EPFO subscribers with monthly basic wages of more than Rs. 15,000 who are forced to contribute lower (at the rate of 8.33% of Rs. 15,000 per month into EPS-95) and thus they get lower pension.
The EPFO had amended the scheme in 2014 to cap monthly pensionable basic wages to Rs. 15,000.
Later, there were demands and deliberations to raise the threshold monthly basic wage to Rs. 25,000, but the proposal was not approved.