Minimum pension of Rs 1,000 under EPFO; wage ceiling up at Rs 15,000

NEW DELHi: The Narendra Singh Tomar-led labour ministry has notified 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 EPFO (Employees' Provident Fund Organisation), a move that will benefit lakhs of pensioners and workers across the country. The changes will be effective from September 1.

The government's decision to fix pension entitlement under the Employees' Pension Scheme 1995 (EPFS-95) will immediately benefit 28 lakh pensioners, while enhancing the minimum wage ceiling for becoming an EPFO subscriberis expected to bring 50 lakh additional formal sector workers under its ambit.

“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,” central provident fund commissioner KK Jalan said. Maximum sum assured under EDLI works out to Rs 3.6 lakh including 20% ad hoc benefit over prescribed amount under the notification. This means, if an EPFO subscriber dies, his family will be entitled to a maximum sum assured of Rs 3.6 lakh instead of the existing Rs 1.56 lakh.

The decision to provide the entitlement under EPS-95 was taken by the Cabinet on February 28. But the UPA government could not implement it because the model code of conduct came into force after the general election dates were announced on March 5. The decision will immediately benefit about 28 lakh pensioners, including 5 lakh widows. In all, there are 44 lakh pensioners under the EPFO scheme.

A fresh notification will be required to continue or enhance minimum pension in the next fiscal. Also, members who had opted for higher pension contributions than mandatory, will have to exercise a fresh option within a six-month period starting September 1.