EPFO May Scrap 12% Ceiling On Employee Pension Contributions
This will potentially enable employees earning a basic pay of up to ₹15,000 to build a larger pension corpus
The Employees’ Provident Fund Organisation (EPFO) is considering removing the 12 per cent contribution cap on members’ payments to the Employee Pension Scheme (EPS), potentially enabling employees earning a basic pay of up to ₹15,000 to build a larger pension corpus. However, the employer’s contribution of 12 per cent will remain unchanged, according to official sources.
Under the current system, employers and employees are required to contribute 12 per cent each of an employee's basic pay to the Employee Provident Fund (EPF). Of the employer’s contribution, 8.33 per cent is allocated to the EPS for employees earning up to ₹15,000 in basic pay. Additionally, the central government contributes 1.16 per cent of the monthly wages for the EPS, limited to the ceiling of ₹15,000.
In parallel, the EPFO is upgrading its IT infrastructure to enhance service delivery. These improvements aim to provide subscribers with a seamless experience, including quicker withdrawals and more efficient handling of their accounts.
These proposed changes reflect the EPFO's efforts to empower low-income workers with better retirement benefits and modernized services.
