EPFO Minimum Pension Hike, New EPFO Pension Rules: Under the new EPFO rules, the minimum pension of private employees may soon increase to Rs 7500. Know the full details…
EPFO Minimum Pension Hike: Private sector employees have been demanding an increase in the minimum pension under the Employees’ Provident Fund Organisation (EPFO) for a long time. In September 2014, the central government fixed the minimum pension at Rs 1000 for the Employees’ Pension Scheme (EPS) run by EPFO.
Under EPF, employees deposit 12 percent of their basic salary in the Provident Fund. While companies also have to deposit the same amount. 8.33 percent of the amount deposited by the employee goes to EPS and 3.67 percent to the EPF account.
Latest developments related to various demands of EPFO members
Pensioners’ body EPS-95 Agitation Committee has said that Union Labour Minister Mansukh Mandaviya has assured timely action on their demands including minimum pension under EPS-95.
A statement from the pensioners’ body said that the Centre has taken a positive stand on the long-pending demands of over 78 lakh pensioners covered under EPFO across the country.
According to the statement, apart from minimum EPS pension, the pensioners’ body has sought an increase in the minimum pension, provision of free medical facilities for retirees and their spouses and correction of mistakes in applications for higher pension benefits among other demands.
It said the minister assured the delegation of an early resolution of these issues. The EPS-95 National Movement Committee (NAC), which has been fighting for the rights of pensioners for several years, said recent discussions with the Centre have raised hopes that the minimum pension under EPS-95 will finally be revised after 10 years.
Will the minimum pension increase in 2025?
Ahead of Budget 2025, a delegation of EPS-95 retired employees met Finance Minister Nirmala Sitharaman and reiterated their demand for increasing the minimum pension to Rs 7,500 per month along with adding dearness allowance (DA). According to the EPS-95 National Movement Committee, the finance minister assured the delegation that their demands will be looked into.
For the last 7-8 years, pensioners have been continuously demanding an increase in their pension. They want the current pension of Rs 1,000 to be increased to Rs 7,500 with the benefit of DA. Apart from this, they also want free medical facility for retired employees and their spouses.
What will happen in the next meeting of EPFO?
The Central Board of Trustees (CBT) of EPFO is scheduled to meet on 28 February 2025, in which the interest rate on provident fund deposits for the financial year 2024-25 will be decided. Although there will be a discussion on the interest rate in this meeting, the issue of pension increase can also be important.
Pensioners and social workers who have been contributing to EPF for a long time are calling the current pension amount inadequate. They say that a pension of Rs 1,000 per month is very less in view of the current inflation and rising medical expenses. The pressure on the government to meet this pending demand is constantly increasing. Now all eyes are on the upcoming CBT meeting, in which a big decision can be taken regarding increasing the pension.
Will stable interest rate be applicable to EPFO?
The government is considering implementing a stable interest rate scheme for EPFO account holders, so that they can get fixed returns despite market fluctuations.
Will the government create an interest stabilization fund?
According to a report by the Economic Times, the government is considering a plan to create an “Interest Stabilization Reserve Fund” for the EPFO. Its objective is that account holders continue to get a stable interest rate despite investment performance. The Ministry of Labor and Employment is studying the feasibility of this proposal.
What will be the EPFO interest rate for 2024-25?
According to media reports, EPFO may keep the EPF interest rate between 8% to 8.25% for the financial year 2024-25.
What major decisions are expected in the CBT meeting?
The Central Board of Trustees (CBT) of EPFO, headed by the Union Minister of Labor and Employment, is the highest decision making body. It includes employer associations, trade unions and officials from the central and state governments.
-The process of interest rate determination is as follows:
-EPFO proposes the interest rate.
-CBT reviews this proposal and approves it.
-After this, it gets final approval from the Finance Ministry.
-After getting approval, this interest rate is credited to the account of EPFO account holders.
EPFO interest rate for 2023-24
For the financial year 2023-24, EPFO fixed the interest rate to 8.25%, revising it from 8.15% in 2022-23. The upcoming CBT meeting will decide whether there will be any change in the interest rate or not.
Amid the ongoing discussions on interest stabilization and possible interest rate revision, this meeting can prove to be very important for lakhs of EPFO account holders. Now all eyes are on this meeting, from where important announcements related to provident fund can be made.
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