Minimum pension of Rs 1,000 under EPFO; wage ceiling up at Rs 15,000

The increase in the minimum wage ceiling from Rs 6,500 to Rs 15,000 a month

The much-awaited minimum monthly pension of Rs 1,000 for Employees’ Provident Fund Organisation (EPFO) subscribers and increase in wage ceiling to Rs 15,000 a month will come into effect from September 1.

“Notifications increasing monthly wage ceiling to Rs 15,000, minimum monthly pension to Rs 1,000 and raising employees’ deposit-linked insurance (EDLI) scheme to Rs 3.6 lakh has been issued and will be effected from September 1,” said Central Provident Fund Commissioner K K Jalan. The decision to increase minimum pension to Rs 1,000 a month will benefit 2.8 million pensioners out of the total 4.4 million covered by the retirement body, Jalan said.

The increase in the minimum wage ceiling from Rs 6,500 to Rs 15,000 a month was announced by finance minister Arun Jaitley in the Union Budget for 2014-15. The move will help in providing social security benefits to about five million additional workers who were left out of the employees’ provident fund coverage due to low-wage cap.

ALSO READ: EPFO retains 8.75% interest for FY15

The Central Board of Trustees’ of the EPFO had on Tuesday decided to retain the interest rate at 8.75 per cent for 2014-15 on the ground that an increase in wage ceiling could lead to overpayment of interest compared to receipts during the year.

The maximum amount assured under the EDLI scheme has been increased to Rs 3.6 lakh from Rs 1.3 lakh at present. If an EPFO subscriber dies, his family will be entitled to receive a sum of up to Rs 3.6 lakh instead of the existing Rs 1.3 lakh, Jalan said.

The decision of a minimum pension entitlement and increase in wage ceiling was taken by the Cabinet under the previous United Progressive Alliance government in February this year and the pensioners were to get a benefit from 1 April this year. However, this couldn't be implemented because of the model code of conduct, this couldn't be implemented.