Since the announcement of the Unified Pension Scheme (UPS) by the Centre, private sector employees have been pressing for an enhanced monthly pension under the Employee’s Pension Scheme (EPS). Under UPS, government employees are entitled to receive a monthly pension upon retirement, amounting to 50% of their last-drawn basic pay. The minimum pension guaranteed is set at Rs 10,000 per month.
This pension scheme incorporates adjustments for inflation based on the CPI- Industrial Workers index. It is important to note that only employees who have completed 25 years of service will qualify for a full pension, which amounts to 50% of their basic pay.
The Chennai EPF Pensioners’ Welfare Association has recently written to Union Minister for Labour and Employment Mansukh Mandaviya advocating for an increase in the minimum monthly pension to Rs 9,000 for pensioners under the EPS, accompanied by dearness allowance.
The association emphasized the inclusion of approximately 75 lakh pensioners under the EPS and drew a comparison with the Unified Pension Scheme (UPS) introduced for government employees, designed to benefit 23 lakh individuals. The letter underscored the oversight faced by EPS 1995 pensioners in light of this new initiative.
Furthermore, the Chennai EPF Pensioners’ Welfare Association expressed its desire for the matter of enhancing the minimum pension to be escalated to Prime Minister Narendra Modi for consideration.
EPFO pension calculation
The members of the Employees’ Provident Fund Organisation (EPFO) are eligible for a pension upon retirement. As per the existing regulations, both employees and employers allocate 12% of the basic salary and dearness allowance to the EPF. The employer’s 12% contribution is divided, with 8.33% directed towards the Employees’ Pension Scheme (EPS) and the remaining 3.67% towards the EPF.
It’s noteworthy that the 8.33% contribution for EPS is restricted to a maximum of Rs.15,000, irrespective of the employee’s higher salary bracket. This limitation on the EPS contribution was instituted in 2014 following an amendment to the EPS guidelines.
Prior to the 2014 EPS amendment, employees possessed the flexibility to opt for increased EPS contribution levels.
In September 2014, a minimum pension of Rs 1,000 per month for pensioners covered under Employee’s Pension Scheme (EPS), 1995, was announced by the central government. Since then, the amount hasn’t been revised.
EPS-95 demands
Last week, a delegation of pensioners’ body EPS-95 National Agitation Committee met with senior officials of the Employees’ Provident Fund Organisation to press for their long-standing demand for a minimum monthly pension of Rs 7,500. The members also demanded full medical coverage for EPS members and their spouses, EPS-95 National Agitation Committee (NAC) said in a statement.
The EPS-95 NAC members have been protesting to press for their demand of Rs 7,500 as monthly pension instead of an average monthly pension of only Rs 1,450 at present.
Earlier this month, Union Minister for Labour and Employment Mansukh Mandaviya had met with EPS-95 NAC representatives and assured them that the government would take necessary steps to address their demand.
The EPS-95 NAC, which includes around 78 lakh retired pensioners and 7.5 crore working employees of industrial sectors, is headquartered in Maharashtra.