EPFO TO RAISE SALARY CAP, NEARLY 1 CRORE LIKELY TO BENEFIT

NEW DELHI: To ensure more workers get retirement benefits, pension fund body Employees’ Provident Fund Organisation (EPFO) will raise the salary ceiling of its mandatory coverage.

Under the proposal, set to be accepted next week, people with basic monthly salary under ₹25,000 will be mandatorily covered under the pension plan.

Currently, workers earning less than ₹15,000 every month come under the provident fund.

“We are raising the ceiling to offset the inflationary factors. Nearly 1 crore additional workers will get retirement benefits if the ceiling is raised,” said an EPFO official.

The EPFO’s central board of trustees will meet on April 12 to decide on the proposal.

“We are wholeheartedly supporting it. It is good that more people get retirement benefits,” said DL Sachdev, national secretary of the All India Trade Union Congress and an EPFO trustee.

Trade unions are also demanding that a scheme should also be planned for retirement benefits for informal sector workers, who constitute more than 90% of India’s work force.

The new wage ceiling would mean an additional burden of ₹2,700 crore for the central government. The Centre contributes 1.16% of basic wages of EPFO subscribers for their pension scheme.

Sources, however, added that even if people with wages up to ₹27,000 come under EPFO coverage, the employers may continue to pay the old rate of contribution.

Currently, they are obliged to pay 12% of ₹15,000, or ₹1800 as monthly contribution.

TRADE UNIONS ARE ALSO DEMANDING THAT A SCHEME SHOULD ALSO BE PLANNED FOR RETIREMENT BENEFITS FOR INFORMAL SECTOR WORKERS, WHO MAKE 90% OF WORKFORCE