EPFO Pension: The Central Board of Trustees (CBT), the highest policy-making body of the Employees’ Provident Fund Organization (EPFO), is meeting in Bengaluru on October 10th and 11th.
The most important issue at this meeting will be the proposal to increase the minimum pension for employees. Currently, it is ₹1,000. According to reports, a proposal to increase it to ₹2,500 per month may be discussed. If this happens, it will be the first change in the pension rate in 11 years.
What is EPS-95?
The Employees’ Pension Scheme 1995 (EPS-95) is a social security scheme that provides a fixed pension to employees upon retirement. Under this scheme, the employer contributes 8.33% of the employee’s salary to the fund, while the central government contributes 1.16%. This contribution is capped at a maximum salary of ₹15,000.
Even if an employee’s fund doesn’t have enough money, the EPS-95 still provides a minimum monthly pension of ₹1,000 with government assistance. However, the fund is now facing an actuarial deficit, meaning it doesn’t have enough money to cover the promised pension.
Under EPS-95, employees aged 58 years or above and having at least 10 years of continuous service are eligible to receive regular pension.
Demand for increase in pension
Trade unions and pensioners have long demanded an increase in pensions. They argue that a ₹1,000 pension does not meet even basic needs in today’s times, while inflation is constantly rising. Retired employees and organizations also say that paying such a low pension to those who have worked for years and contributed to the fund is unfair and insulting.
The unions are demanding a minimum pension of ₹7,500. However, considering the current situation, a proposal could be made to increase it by ₹2,500 per month.
Other expectations from the CBT meeting
This meeting, taking place after seven months, is also likely to discuss EPFO 3.0. This is a digital upgrade project that will completely digitize EPF transactions and claims processes. This will make it easier for employees to withdraw and claim funds when they need them.
Reforms coming under EPFO 3.0
- PF withdrawal facility through ATM and UPI
- Auto-claim settlement means instant claim settlement
- Paperless process through digital services
- OTP-based verification system
- Easy death claim process
- Simplifying the data update and correction system
Overall, this October meeting can give a big gift to the employees and pensioners in the form of digital facilities, faster service and increased pension.
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