There’s some wonderful and comforting news for private sector employees. The Finance Ministry has approved raising the salary threshold for mandatory retirement fund coverage from ₹15,000 per month to ₹25,000 per month. This threshold had remained unchanged for over a decade. Once this new threshold is officially implemented, even more salaried employees will be included in the broader scope of mandatory provident fund and pension coverage. However, a final decision on when this new salary threshold will be implemented will be made only after the Union Cabinet approves it.
What are the current rules and what changes will be expected in the future?
According to the current regulations, only employees with a basic salary of up to ₹15,000 per month are covered by the mandatory Employee Provident Fund (EPF) and Employee Pension Scheme (EPS). Employees earning more than this limit were previously exempt from this obligation, and employers were not legally required to include them. However, with this threshold now being raised to ₹25,000, all employees earning between ₹15,000 and ₹25,000 per month will also be covered by this mandatory government scheme. This major government change is expected to significantly increase social security coverage for private sector employees.