Dear Friends
The much-awaited minimum monthly pension of Rs.1,000 and a higher wage ceiling of Rs.15,000 for social security schemes run by retirement Fund manager Employees’ Provident Fund Organisation (EPFO) will be implemented from September 1.
The government’s decision to fix pension entitlement of Rs.1,000 under the Employees’ Pension Scheme 1995 (EPFS-95) will immediately benefit 28 lakh pensioners who get less than this amount at present. The move to enhance the minimum wage ceiling for becoming a subscriber of the EPFO to Rs.15,000 a month is expected to bring 50 lakh additional formal sector workers under the ambit of the body.
“The government has notified enhancement of wage ceiling to Rs.15,000 per month, fixed minimum monthly pension at Rs.1,000 under EPS-95 and enhanced the maximum sum assured under the Employees’ Deposit Linked Insurance (EDLI) Scheme to Rs.3 lakh,” EPFO’s Central Provident Fund Commission K. K. Jalan told PTI.
Mr. Jalan said: “Now the maximum sum assured under the EDLI works out to be Rs.3.60 lakh, including 20 per cent ad hoc benefit over the prescribed amount under the notification.” This means that in case an EPFO subscriber dies, his family will be entitled to a maximum sum assured of Rs.3.60 lakh instead of existing Rs.1.56 lakh.
Mr. Jalan said the notification regarding minimum pension, wage ceiling and EDLI would be effected from September 1. Thus all pensioners getting less than Rs 1,000 per month would get at least this much pension from October.
The following may be the impact after the amendment:
1. The employees who have already opted out from PF coverage ( whose basic is above Rs.6500) would be covered under the scheme in case their Basic Wages is higher than Rs.6500 p.m. and upto Rs.15000/- per month.
2. Employees who are exiting PF Members and over a period their basic wages have gone up upto Rs.15000 per month and even above (once member always a member), currently their PF contribution is deducted on a maximum wage limit of Rs, 6500/-, but from now onwards their contribution would be deducted on the actual basic wages upto maximum limit Rs.15000/-p.m.
3. Similarly, the companies who are currently extending PF benefit only on Rs.6500/- irrespective of their wages , may have to increase the PF wages to Rs.15000/- and need to pay the employer contribution of 13.61% on Rs.15000/-
4. The pension amount limit also will increase from Rs.541/- to Rs.1000/-.
5. The employees who current basis wages is less