Over 1.7 mn opt for higher pension on more contribution under 'EPS-95'

As many as 1.749 million members of retirement fund body EPFO have applied for the option to contribute on their actual (higher) basic pay for eventually getting higher pension after an apex court order in November 2022, Parliament was informed on Monday.

Presently, these applicants are either contributing or contributed on fixed threshold of Rs 15,000 per month, irrespective of their higher actual basic wages.

"In implementation of the judgement on November 4, 2022 passed by Supreme Court, an online facility was provided by EPFO, wherein total 17.49 lakh applications for Validation of Option/Joint Options were successfully submitted by the applicants," stated Minister state of Labour & Employment Shobha Karandlaje.

On November 4, 2022, the Supreme Court ruled in favour of existing employees being able to opt for a higher pension under the Employees' Pension Scheme (EPS), 1995.

The Employee Pension Scheme 1995 (EPS-95), which the Employees' Provident Fund Organisation (EPFO) introduced on November 19, 1995, is a social security initiative intended to cater to the retirement needs of employees in the organised sector.

Administered by the EPFO, this scheme guarantees pension benefits to eligible employees who reach the age of 58.

In another written reply to the House, the minister said the EPS, 1995 is a 'Defined Contribution-Defined Benefit' social security scheme.

The corpus of the Employees' Pension Fund is made up of contribution by the employer at the rate of 8.33 per cent of wages; and contribution from central government through budgetary support at the rate of 1.16 per cent of wages, up to Rs 15,000 per month.

The fund is valued annually as mandated under paragraph 32 of the EPS, 1995.

The government, for the first time, in 2014, provided a minimum pension of Rs 1,000 per month to the pensioners under the EPS, 1995 by providing budgetary support, which was in addition to the budgetary support of 1.16 per cent of wages provided annually towards EPS to EPFO.

The minister said the EPFO has also started an initiative termed as PRAYAAS with an aim to hand over PPOs to members of EPS, 1995 on the day of superannuation.

Informative messages through audio visual means are regularly posted on social media, including YouTube, X, and Facebook, for easy understanding of benefits of the scheme, she added.