An expert committee can be constituted soon to increase the wage limit, which will decide the limit according to inflation. It will be reviewed from time to time to come under the purview of EPFO.
EPFO Pension Rule: There is good news for the employees-pensioners. The central government may soon increase the salary limit of the pension scheme of the Employees’ Provident Fund Organization (EPFO). It is reported that there is a plan to link the EPFO pay scale with the 21000 higher pay scale under the Employees’ State Insurance Corporation. With this, those employees whose salary is up to 21000 will get double benefit.
At present, the salary limit for retirement saving scheme in EPFO’s Employees’ Provident Fund (EPF) scheme is Rs 15,000 per month, it can be increased to Rs 21,000. If this happens, 75 lakh more employees will come under the ambit of EPFO. Now their number is 6.8 crore. The salary cap was last raised in 2014 from Rs 6,500 per month.
Committee will be constituted
According to media reports, an expert committee can be constituted soon to increase the wage limit, which will decide the limit according to inflation. It will be reviewed from time to time to come under the purview of EPFO. Now Rs 15,000 on monthly salary at 12% is Rs 1,800. If the salary limit is raised to Rs 21,000, the PF contribution at 12% will increase to Rs 2,520. This will increase the retirement fund.
Interest is also received from EPFO
Explain that under this scheme, 12% amount is deducted from the salary of the employee and deposited in the pension scheme and the company has to deposit the same amount in the employee’s account. Means the savings of the employee will double in 1 day. After this, interest is received from EPFO which is more than any bank FD.
It may be noted that the Center currently pays around Rs 6,750 crore every year towards the Employees’ Pension Scheme of EPFO, contributing 1.16 per cent of the total basic salary of EPFO subscribers towards the scheme. Recently, the Supreme Court upheld the validity of the Employees’ Pension (Amendment) Scheme of 2014, although the court struck down the limit of Rs 15,000 monthly salary for joining the pension fund.
