The Employees' Provident Fund Organization (EPFO) is preparing to give big gifts to the unorganized sector i.e. daily wage and petty workers. These laborers can be included in the proposed pension scheme of EPFO. In fact, the Employees' Provident Fund Organization can increase the coverage of its pension plan.
This new scheme is proposed to be based on individual contribution, which ensures that every employee gets a minimum pension of Rs 3,000 per month after the age of 60 years. This proposed scheme may be named as Universal Pension Scheme, which aims to address various challenges of the existing Employees' Pension Scheme (EPS), 1995.
There is no coverage for employees earning more than Rs 15,000 per month, but a simple pension amount.
There will be provisions for retirement pension, widow pension, children's pension, and disability pension in the new scheme. However, the minimum qualifying period of service for this pension benefit will be increased from 10 to 15 years. If a member dies before the age of 60 years, then a pension will be given to the family under the Universal Pension Scheme.
To get 3 thousand pensions every month, this amount will have to be deposited
A total of Rs 5.4 lakh needs to be deposited for a minimum pension of Rs 3,000 every month. A committee set up by the Central Board of Trustees (CBT), the highest decision-making body of EPFO, said EPFO members can also voluntarily opt for higher contributions and deposit a larger amount for a higher pension.
At present, EPF contribution is mandatory for workers earning up to Rs 15,000 per month in establishments having more than 20 workers.
Every employee gives 12% of his basic salary in the EPF scheme. EPS is mandatory for all those who contribute to EPF. 8.33% of the employer's contribution is deposited in the pension scheme, subject to a ceiling of Rs 1,250 per month based on the salary ceiling of Rs 15,000 per month.