Employees’ Pension Scheme notified, beneficiaries capped

Those workers whose starting salary is Rs 15,000 or less will be eligible to become members of the EPS.

Written by Surabhi | New Delhi | Published:September 5, 2014 1:11 am

Even as the labour ministry has finally notified a minimum monthly pension of Rs 1,000 to subscribers of the Employees’ Pension Scheme, it has introduced fresh provisions to cap the number of beneficiaries as it tries to keep the scheme viable for the government.

Under the fresh guidelines, only those workers whose starting salary is Rs 15,000 or less will be eligible to become members of the EPS.

“No diversion to EPS shall be made for all new PF members on or after September 1, 2014 having (pay) more than Rs 15,000 at the time of joining,” the Employees’ Provident Fund Organisation has stressed in a recent circular.

This is a significant change from the previous system, where in all members of the EPFO were also automatically made subscribers of the related EPS.

Earlier, of the 24 per cent contribution deducted from a worker’s monthly basic pay for provident fund, 8.33 per cent was diverted to the EPS.

The EPFO has also stressed that new members will no longer have the option of contributing over the defined wage ceiling of Rs 15,000 to the EPS. Existing subscribers who have till now been contributing over the Rs 6,500 wage cap to the EPS, however, have been given an option to continue contributing over the increased wage cap but they would also have to contribute the government subsidy of 1.16 per cent on the excess amount.

“The fresh option is to be exercised within a period of six months…. if it is not exercised, it shall be deemed that the employee has not opted in allowing contribution over the wage ceiling,” said the EPFO, adding that the excess contributions will instead be diverted to the EPF account of the member.
The new norms have also devised a fresh calculation for assessing the pensionable salary where in the period for calculating the average monthly pay has been increased from 12 months to 60 months.

Meanwhile, the pensionable salary would be calculated on a pro-rata basis separately for the period up to August 31, 2014 and the subsequent period using the wage ceiling of Rs 6,500 per month and Rs 15,000 per month respectively. Similarly, the withdrawal benefit would also be based on the weighted wages at different wage ceilings.

For all the latest Business News, download Indian Express App

  1. K
    kuldeep singh
    Sep 19, 2015 at 2:39 pm
    I Have been working in a pvt ltd co. since 1980. And during april 2016 i will be retired from sercice at the age of 60 years. Please let me know what will be the pension amount
    Reply
    1. A
      Abhishek
      Oct 28, 2014 at 11:25 am
      Any idea on how to opt for withdrawl from new EPS scheme, wherein Rs 1250 is getting diverted to EPS account?
      Reply
      1. A
        Abhishek
        Oct 28, 2014 at 11:25 am
        Any idea on how to opt for withdrawl from new EPS scheme, wherein Rs 1250 is getting diverted to EPS account?
        Reply
        1. N
          Nimesh
          Nov 12, 2014 at 7:20 am
          What will be maximum pention amount one will get after retirement
          Reply
          1. O
            Om Prakash Paliwal
            Apr 12, 2017 at 5:25 pm
            What is recent EPF pension ? Minimum & Highest.
            Reply
          2. M
            Murulidhara H
            Sep 20, 2014 at 4:55 pm
            Govt., PSU employees in service are very happy as entire amount goes to EPF as majority will get more than Rs.15000/- ry per month. They will get good interest on aculated amount (by keeping in banks, etc.,deposit schemes) than pension after retirement.
            Reply
            1. M
              Murulidhara H
              Sep 22, 2014 at 5:12 pm
              You may not get back the amount so far contributed. Pension amount will be fixed after 58 years by taking in to consideration the amount so far contributed or till the date of your option accepted not to contribute. Lucky that once the acceptance is given and entire amount goes to EPF, you will not only get YOUR MONEY from EPF after retirement, good return on that amount also through deposits.
              Reply
              1. R
                Rajinder Gupta
                Nov 29, 2014 at 4:22 pm
                At present my age is 28 yrs and my ry is more than Rs 15,000/- pm. I will contribute for further 29 years if I opt for the said scheme. Kindly advise me whether I should adopt for this scheme or think for the other saving/ Life Insurance scheme for Rs 17000/- per annum which is equavlent to my employer's contribution plus my contribution i.e. 1.6%. Further I am existing member of this scheme and if I donot opt now for the revised scheme can I opt out?
                Reply
              2. U
                Uday
                Sep 22, 2014 at 5:34 am
                Yes, very much true. We have been contributing Rs. 541/- per month since we started working. Now, most of us would not opt to continue to contribute.Now the question is, can we withdraw the money we contributed so far (no_of_months contributed * 541) ? If not, would they deposit that amount to EPF account ?
                Reply
                1. Load More Comments