Pension of private employees will increase, EPFO is going to take a big decision after 11 years
Private employees: There's no shortage of private employees these days. If you're a private employee whose PF is deducted from your salary, this news is useful. The good news is that after 11 years, the EPFO may decide to increase private employee pensions.
News - (private employees) Diwali is just around the corner, and private employees could receive a significant pension increase before Diwali.
Private employees have been demanding a pension increase for some time now. If the increase is approved in this meeting, millions of pensioners could receive relief after 11 years.
How much will the minimum pension of employees increase?
For your information, let us tell you that the Central Board of Trustees (CBT), the highest policy-making body of the Employees' Provident Fund Organization (EPFO), is now scheduled to meet.
This meeting is scheduled to take place in Bengaluru on October 10th and 11th. A proposal to increase the minimum pension for employees is likely to be discussed at this meeting.
Currently, it is ₹1,000. According to reports, an increase to ₹2,500 per month could be discussed. If this happens, it would be the first change in the pension rate in 11 years.
Know what is EPS-95
Now, let's discuss what EPS-95 is. The Employees' Pension Scheme 1995 is a social security scheme. Under this scheme, employees are given a fixed pension after retirement.
Under this scheme, the employer contributes 8.33 percent of the employee's salary to the fund, while the central government contributes 1.16 percent. This contribution is capped at a maximum salary of ₹15,000.
This much pension is given every month
Let us tell you that even if there is not enough amount in the employee funds, under EPS-95, at least Rs 1,000 pension is given every month with the help of the government, but now after so much time, this fund is facing actuarial deficit, that is, in a way, it can be said that the fund does not have as much money as the pension promised.
Why are employees demanding an increase in pension?
Trade unions and pensioners have long been demanding an increase in pensions. They argue that in today's inflationary times, an employee pension of ₹1,000 falls short of even basic needs.
Retired employees and organizations argue that providing such a low pension to those who have worked for years and contributed to the fund is unfair and insulting.
Unions are demanding a minimum pension of ₹7,500 (Private Employees minimum pension). However, considering the current situation, a proposal to increase this to ₹2,500 per month may be proposed.
Claim process made digital
This meeting is taking place after a gap of seven months, and EPFO 3.0 may also be discussed. It's a digital upgrade project, which has completely digitized the EPF transaction and claim process. This will greatly simplify the process of withdrawing and claiming funds when employees need them.
These reforms will happen under EPFO 3.0
Under EPFO 3.0, several reforms are set to be implemented after 11 years. These reforms include the PF withdrawal facility through ATMs and UPI, auto-claim settlement, paperless processes through digital services, OTP-based verification system, easier death-related claims processing, simplifying the data update and correction system, etc.
Overall, this October meeting could bring significant benefits to employees and pensioners in the form of digital convenience, faster service, and increased pensions.