Lok Sabha Replies Detail Stance on Wage Cap, Minimum Benefits, Higher Pension

The Union Ministry of Labour and Employment recently provided comprehensive replies in the Lok Sabha, addressing three crucial and long-standing demands from organized sector employees and pensioners: increasing the Employees’ Provident Fund (EPF) wage ceiling, hiking the minimum pension under the Employees’ Pension Scheme (EPS-95), and the ongoing implementation of the higher pension option.

EPF Wage Cap Hike Deferred

The Ministry addressed the persistent demand to increase the statutory wage ceiling for contributions to the EPF from the current Rs 15,000 per month to Rs 30,000.

In its reply, the Ministry indicated that there are currently no immediate plans to raise this ceiling.

The decision to keep the ceiling at Rs 15,000 remains in place, suggesting that any change is subject to review by the Central Board of Trustees (CBT), the apex decision-making body of the Employees’ Provident Fund Organisation (EPFO).

The Rs 15,000 ceiling determines the maximum salary on which contributions from employers and employees are mandatory.

This ceiling was last revised in 2014.

Increasing this ceiling would effectively bring a larger segment of middle-income employees under the mandatory, full benefit of the social security scheme.

Minimum EPS-95 Pension Stays at Rs. 1,000

The Ministry was responding to widespread calls for a substantial hike in the minimum monthly pension under the EPS-95, from Rs 1,000 to Rs 7,500.

However, it clarified that the current minimum pension amount will be maintained.

The government stated that any revision of the pension amount involves complex actuarial calculations and significant financial implications.

Because the EPS is a defined contribution scheme with a partially guaranteed pension amount, raising the pension to Rs 7,500 would demand massive budgetary support.

The government last increased the minimum pension to Rs 1,000 in 2014.

The Ministry currently lacks the financial bandwidth to absorb the cost of a seven-fold increase, disappointing millions of low-income pensioners.

Higher Pension Rollout Status

The Supreme Court’s judgment in November 2022 mandated the higher pension option.

Regarding its implementation, the Ministry confirmed that the EPFO is actively processing joint option forms.

The Ministry highlighted the complexity and scale of the exercise.

This involves tracing historical wage and contribution data, sometimes decades old, for millions of members.

The process has been phased, with various deadlines being extended.

This ensures all eligible pensioners and employees have the opportunity to opt for a pension based on their actual higher salaries.

The reply noted the establishment of dedicated online portals and extensive communication efforts to streamline the complex, multi-stage verification process.

This rollout, while challenging, remains a primary focus for the EPFO to comply with the judicial directive.

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