New Delhi. Big news is coming out regarding minimum pension for lakhs of employees and pensioners who have worked in the private sector. There has been a demand for a long time to increase the minimum monthly pension of the Employees' Pension Scheme (EPS-95) provided under the Employees' Provident Fund Organization (EPFO). At present, eligible pensioners get a minimum pension of Rs 1,000 per month. Now a proposal to increase it to Rs 3,000 is under discussion.
Eyes set on November 19 meeting
The meeting of the Central Board of Trustees (CBT) of EPFO is proposed on November 19 in Gir, Gujarat. It is believed that the issue of increasing the minimum pension may be discussed in this meeting. Trade unions have also been raising the demand for increasing the current amount of pension for a long time. However, no final government approval has been received yet regarding the pension of Rs 3,000.
How is pension made from PF money?
Generally, 12 percent contribution from the salary of employees doing private jobs goes into the PF account. The employer also contributes 12 percent. Out of this, a prescribed portion is deposited in the Employees' Pension Scheme (EPS), while the remaining amount goes to the EPF account. On the basis of this contribution and service period, one gets the benefit of pension after retirement.
How is pension calculated?
A prescribed formula is used to calculate EPS pension.
Pension = Pensionable Salary × Pensionable Service ÷ 70
Pensionable salary is usually calculated based on the average salary of the last 60 months of employment. Normally a minimum of 10 years of eligible service is required to receive regular monthly pension under EPS.
More than 81 lakh pensioners may benefit
According to reports, there are around 81.48 lakh EPS pensioners in the country. If the proposal to increase the minimum pension is approved, then lakhs of retired employees getting less pension may get relief. At present, everyone's eyes are on the meeting of November 19 and the next decision of the government. Keep in mind, the issue of increasing pension from Rs 1,000 to Rs 3,000 is still at the stage of proposal and possible discussion, it should not be considered as an implemented decision.