Wage ceiling for EPF and minimum pension increased

Government decided to fix the minimum monthly pension as Rs. 1000/- per month under the Employees Pension Scheme, 1995. This will be directly benefiting around 28 lakhs pensioners who get less than this amount at present as Pension.

Along with fixing the minimum monthly pension at Rs.1,000 under Employees Pension Scheme – 95, Government has also notified enhancement of wage ceiling to Rs.15,000 per month and enhanced the maximum sum assured under the Employees’ Deposit Linked Insurance (EDLI) Scheme to Rs.3 lakhs.

Government’s move to enhance the minimum wage ceiling for becoming a subscriber of Employees’ Provident Fund Organisation to Rs 15,000 per month is expected to bring an additional 50 lakhs formal sector workers within the ambit of the body.

Under the modified scheme, the minimum monthly pension for widows has been fixed at Rs 1,000 and for children at Rs 250 per month. Similarly the minimum pension entitlement for orphans has been fixed at Rs 750 per month. The amended scheme also provides that the pensionable salary will be the average monthly pay drawn during the contributory period of service for 60 months preceding the date of exit from membership of the pension fund.

Earlier the pensionable salary, which became the basis for computation of pension, was an average monthly pay drawn for 12 months. The new rule will be effected from September 1. The notification further provides that those members, who had opted for higher pension contributions compared to mandatory requirement as per the prescribed wage ceiling under the scheme, would have to exercise the fresh option in this regard within six month period beginning September 1.

At present, there are EPFO members who had exercised the option of higher contribution towards pension fund under Employees Pension Scheme – 95. They were contributing for pension on over the Rs 6,500 monthly wage ceiling.

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