There has been a long-standing demand to increase the minimum pension under the Employees’ Provident Fund Organisation (EPFO) for private sector employees.
In September 2014, the Centre had last fixed the minimum pension amount at Rs 1,000 under the Employees’ Pension Scheme (EPS) governed by the EPFO.
Under EPF, employees deposit 12% of their basic salary in the provident fund, while employers also contribute the same amount. Of this contribution made by the employer, 8.33% goes to EPS, and 3.67% is deposited in the EPF account.
Latest developments around EPFO members’ various demands
The pensioners’ body EPS-95 Agitation Committee has said that Union Labour Minister Mansukh Mandaviya has assured timely action on their demands, including a minimum pension under EPS-95.
The Centre has taken a positive stance on the long-pending demands of over 78 lakh pensioners covered under EPFO across the country, a statement by the pensioners body said.
Among various demands, apart from minimum EPS pension, the pensioners’ body has sought an increase in the minimum pension, provision of free medical facilities for retirees and their spouses, and rectification of errors in applications for higher pension benefits, according to the statement.
The minister assured the delegation of a swift resolution to these issues, it said.
The EPS-95 National Agitation Committee (NAC), which has been fighting for pensioners’ rights for many years, said that recent discussions with the Centre have given hopes that the minimum pension under EPS-95 would see a revision finally after 10 years.
Will the minimum pension increase in 2025?
Ahead of Budget 2025, a delegation of EPS-95 retired employees met Finance Minister Nirmala Sitharaman and reiterated the demand to increase the minimum pension to Rs 7,500 per month as well as add dearness allowance (DA). According to the EPS-95 National Agitation Committee, the Finance Minister assured the delegation that their demands would be looked into.
For the last 7-8 years, pensioners have been continuously demanding an increase in their pension. They want the existing pension of Rs 1,000 to be increased to Rs 7,500, along with the benefit of DA. Apart from this, they also want free medical facilities for retired employees and their spouses.
What will happen in the next meeting of EPFO?
The Central Board of Trustees (CBT) of EPFO is scheduled to meet on 28 February 2025, in which the interest rate on provident fund deposits for the financial year 2024-25 will be decided. Although there will be a round of discussion on the interest rate, the issue of pension increase can also be important in this meeting.
Pensioners and social workers who have been contributing to EPF for a long time are calling the current pension amount inadequate. They say that a pension of Rs 1,000 per month is very less considering the current inflation and rising medical expenses. The pressure on the government to meet this pending demand is constantly increasing. Now all eyes are on the upcoming CBT meeting, in which a big decision can be taken regarding increasing the pension.
Will a stable interest rate be applicable on EPFO?
The government is considering implementing a stable interest rate scheme for EPFO account holders, so that they can get fixed returns despite market fluctuations.
Will the government create an interest stabilization fund?
According to a report in the Economic Times, the government is considering a plan to create an “Interest Stabilization Reserve Fund” for the EPFO. Its objective is that account holders continue to get a stable interest rate irrespective of the investment performance. The Ministry of Labor and Employment is studying the feasibility of this proposal.
What will be the EPFO interest rate for 2024-25?
According to media reports, EPFO may keep the EPF interest rate for the financial year 2024-25 between 8% and 8.25%.
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What are the major decisions expected at the CBT meeting?
The Central Board of Trustees (CBT) of EPFO, headed by the Union Minister of Labor and Employment, is the highest decision-making body of the organization. It consists of employer associations, trade unions, and officials of the central and state governments.
-The process of interest rate determination is as follows:
-The EPFO proposes the interest rate.
-The CBT reviews and approves this proposal.
-It then gets final approval from the Finance Ministry.
-After getting approval, this interest rate is credited to the accounts of EPFO account holders.
EPFO interest rate for 2023-24
For the financial year 2023-24, EPFO fixed the interest rate at 8.25%, revising from 8.15% in 2022-23. It will be decided in the upcoming CBT meeting whether there will be any change in the interest rate or not.
Amid the ongoing discussions about interest stabilization and possible interest rate revision, this meeting can prove to be very important for lakhs of EPFO account holders. Now all eyes are on this meeting, from where important announcements related to the provident fund can be made.