Retirement fund body EPFO is considering a new pension product for the organised sector workers who are getting basic wages of more than ₹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 ₹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 ₹15,000," a source privy to the development told PTI.
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 ₹15,000 monthly basic wages who are forced to contribute lower (at the rate of 8.33% of ₹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 ₹15,000.
The threshold of ₹15,000 applies only at the time of joining service. It was revised upward from ₹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 ₹25,000, but the proposal was not approved.