New Delhi: The Employees’ Provident Fund Organisation (EPFO) is getting ready to bring some real relief for millions of salaried workers. They’re looking at raising the salary cap for mandatory pension contributions. Right now, if you earn up to Rs 15,000 a month, you have to contribute. That limit hasn’t budged since 2014, when it went up from Rs 6,500.
M. Nagaraju, Secretary of the Department of Financial Services, says lots of employees earn more than the current cap but get left out of the pension system. Since they don’t get pension benefits, many end up with little to fall back on after they retire. They often have to rely on their kids for money. Raising the limit could pull more people into the safety net and help them actually save for retirement.
Here’s how things work at the moment?
If you make more than Rs 15,000 a month as basic wages, you’re not automatically enrolled — you have to opt in, and not everyone does. That means plenty of higher-earning employees miss out on the retirement protection the Employees’ Pension Scheme (EPS) offers.
Now, EPFO wants to fix this. They’re planning to push the mandatory salary limit up to Rs 25,000 a month. The Central Board of Trustees will look at the proposal next year, and there’s a good chance they’ll give it the green light.
Honestly, employees have been asking for this for ages. If it goes through, over a crore workers could finally get the retirement security they’ve been missing. Once the new rule kicks in, lots more people will be included in the provident fund and pension system—making life after retirement a lot less stressful.
