Potential Increase in Minimum EPS Pension: Who Stands to Benefit?
Hike in minimum EPS pension of Rs 1,000 under consideration by EPFO: Know who will benefit and how?
The Economic TimesImage: The Economic Times
The Indian Employees' Provident Fund Organisation (EPFO) is considering raising the minimum monthly pension under the Employees' Pension Scheme (EPS-95) from ₹1,000. This change could significantly impact members earning below the current minimum, especially those with lower average salaries and shorter service periods.
- 01The minimum EPS pension may increase from ₹1,000, benefiting many EPFO members.
- 02Employees with average basic pay below ₹7,000 currently receive less than ₹1,000 and will benefit from the hike.
- 03Pension calculations are based on average salary over the last 60 months and years of service.
- 04Employees with longer service periods and higher salaries are less likely to benefit unless the increase is substantial.
- 05The proposed increase could range from ₹1,500 to ₹3,000, impacting various salary brackets.
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The Employees' Provident Fund Organisation (EPFO) is reportedly considering an increase in the minimum monthly pension under the Employees' Pension Scheme (EPS-95) from ₹1,000. This potential change aims to benefit members who currently receive lower pensions due to their basic salaries being below the minimum threshold. Employees contributing to the EPS with an average basic pay of ₹15,000 over their last 60 months and a service period of at least 10 years are eligible for the pension. The pension is calculated using the formula: Pension = (Pensionable salary × pensionable service years) / 70. Employees with an average pay below ₹7,000 would particularly benefit from the hike, as they currently receive less than the minimum pension. The government is considering raising the minimum pension to amounts ranging from ₹1,500 to ₹3,000, which would impact various salary brackets, especially those with shorter service periods. However, employees with higher salaries and longer service periods may not see significant benefits unless the increase is substantial.
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The proposed increase in the minimum EPS pension will primarily benefit employees earning below the current threshold, ensuring they receive a more adequate pension.
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