INSUBCONTINENT EXCLUSIVE:
EPFO is mulling a pension product for workers with basic wages of more than Rs 15,000New Delhi: Retirement fund body employees provident
fund organisation (EPFO) is thinking of coming out with a new pension product for organised sector workers who are getting basic wages of
more than Rs 15,000 per 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 per 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.As per the source, the proposal on this new pension product could come up for discussion in
the meeting of EPFO's apex decision making body Central Board of Trustees (CBT) on March 11 and 12 at Guwahati.During the meet, a
sub-committee constituted by the CBT on pension related issues in November 2021 would also submit its report.The source explained that there
are EPFO subscribers who are getting more than Rs 15,000 monthly basic wages who are forced to contribute lower (at the rate of 8.33 per
cent 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.The threshold of Rs 15,000 applies only at the time of joining service
It was revised upward from Rs 6,500 from September 1, 2014 in view of price rise and pay revisions in the formal sector.Later, there were
demands and deliberations to raise the threshold monthly basic wage to Rs 25,000, but the proposal was not approved.As per industry
estimates, raising pensionable pay could have brought 50 lakh more formal sector workers under the ambit of EPS-95.The source said there is
a need for a new pension product for those who are either forced to contribute lower or who could not subscribe to the scheme as their
monthly basic wages were higher than Rs 15,000 at the time of joining service.The source further added that there is no move to hike the
pensionable salary cap by the EPFO in the immediate future and in that scenario, the body has to think about giving coverage to those formal
sector workers who are excluded from the EPS-95 due to higher basic wages.The matter of pensionable salary cap is also sub-judice in the
In 2014, Kerala High Court allowed the employees to contribute into the EPS-95 on the basis of the actual basic wages drawn by them.In April
