The Central Board of Trustees (CBT), the highest decision-making body of the Employees’ Provident Fund Organization (EPFO), is scheduled to meet in Bengaluru on October 10 and 11. According to reports, the meeting is likely to discuss a proposal to increase the minimum pension amount from Rs 1,000 to Rs 2,500 per month.
Increase in minimum pension amount?
The minimum pension under the Employees’ Pension Scheme (EPS-95) under the EPFO is currently Rs 1,000 per month. This amount was fixed in 2014 and has remained unchanged since then. Various employee organizations have long demanded that the amount of ₹1,000 is too low considering current inflation. Trade unions and various pensioners’ associations have long demanded an increase in the pension amount under the Employees’ Pension Scheme (EPS) to ₹7,500. However, reports indicate that the CBT will not increase the pension by 7.5 times, but may consider increasing it to ₹2,500.
What is the maximum limit
Pensionable pay is the average basic pay + dearness allowance for the last 60 months of service, with a maximum limit of ₹15,000. Pensionable service represents the total years of service, rounded off if it is 6 months or more, and you need at least 10 years of service to be eligible for a pension. The maximum limit for pensionable pay is ₹15,000 per month.
What can we expect from the meeting
In addition to discussing and deciding on increasing the minimum pension, the board may also discuss digital reforms, investment policy, and the pension scheme’s funding structure. While the final decision will require government approval, the outcome of this meeting could impact the future of millions of pensioners and employees.
How is EPFO pension determined?
Pension under EPS is calculated using a fixed formula:
Pension = (Pensionable pay × Pensionable service) ÷ 70