EPFO Members Seek Higher Pension Following Supreme Court Ruling
In a significant development, as many as 1.749 million members of the Employees’ Provident Fund Organisation (EPFO) have applied to contribute based on their actual (and often higher) basic pay, aiming for an increased pension. This wave of applications comes in response to a Supreme Court order issued in November 2022, which allowed existing employees the option of choosing a higher pension under the Employees’ Pension Scheme (EPS), 1995.
Currently, these applicants have been contributing, or have previously contributed, based on a fixed threshold of ₹15,000 per month, irrespective of their actual earnings. Minister of State for Labour & Employment, Shobha Karandlaje, announced that an online facility was made available by EPFO in compliance with the November 4, 2022, judgement, leading to a successful submission of 17.49 lakh applications for the Validation of Option/Joint Options.
The EPS-95, introduced by the EPFO on November 19, 1995, is designed to provide social security benefits to employees in the organized sector. It guarantees pension benefits to eligible employees upon reaching the age of 58 years. The scheme operates on a ‘Defined Contribution-Defined Benefit’ model, ensuring a steady income post-retirement.
The Employees’ Pension Fund is primarily financed through employer contributions at a rate of 8.33% of wages and a budgetary support contribution from the central government at the rate of 1.16% of wages, applicable up to ₹15,000 per month. As mandated by the EPS, 1995, the fund’s value is assessed annually. In an important step, in 2014, the government introduced a minimum pension of ₹1,000 per month for EPS pensioners, complemented by the ongoing budgetary support aimed at sustaining the scheme.
Furthermore, Minister Karandlaje highlighted an initiative called PRAYAAS, which intends to facilitate the distribution of Pension Payment Orders (PPOs) to members of the EPS, 1995 on the day of their retirement. To enhance understanding of the scheme’s benefits, informative messages are consistently shared via audio-visual content on social media platforms such as YouTube, X, and Facebook.
This proactive approach by the EPFO not only empowers its members with better retirement benefits but also ensures more accessible communication regarding their rights and entitlements under the Employees’ Pension Scheme.
