Mumbai: The Employees’ Provident Fund Organisation (EPFO) has urged employees earning up to Rs 25,000 in monthly basic wages to contact their employers and enrol in social security schemes, following the reported increase in the wage ceiling from Rs 15,000 to Rs 25,000.
The revised limit is expected to bring more workers under the Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS) and Employees’ Deposit-Linked Insurance (EDLI) Scheme.
How To Enrol In EPFO Schemes?
According to the reported EPFO advisory, employees earning up to Rs 25,000 in basic wages should approach their employers to complete the enrolment process.
Eligible workers in establishments covered by EPFO can receive retirement savings, pension benefits and life insurance protection of up to Rs 7 lakh.
Employees should also ensure that their Universal Account Number (UAN) is activated and their employment details are correctly recorded.
How Will EPF Contributions Change?
Under the EPF scheme, employees and employers generally contribute 12 per cent of eligible monthly wages towards retirement benefits.
At the earlier Rs 15,000 ceiling, the contribution worked out to Rs 1,800 from each side.
At Rs 25,000, the corresponding contribution would increase to Rs 3,000 each, subject to applicable contribution rules.
However, the employer's contribution is divided between EPF and EPS where pension contributions apply.
The accumulated EPF balance earns interest, helping employees build savings over their working years.
What Happens To EPS Pension Benefits?
The EPS provides monthly pension benefits to eligible employees after retirement, generally requiring at least 10 years of qualifying service.
Employers contribute 8.33 per cent of pensionable wages towards EPS, subject to the applicable wage ceiling and membership conditions.
At Rs 15,000, the monthly pension contribution was approximately Rs 1,250. At Rs 25,000, it would be around Rs 2,083.
A higher pensionable salary could improve retirement benefits, depending on the final rules and an employee's eligible service.
What Insurance Benefits Are Available?
The EDLI scheme provides insurance protection to families of eligible EPF members who die while in service.
Under the existing framework, eligible nominees can receive insurance benefits ranging from Rs 2.5 lakh to Rs 7 lakh.
Although a higher wage ceiling could affect future calculations, an increase beyond the existing Rs 7 lakh maximum has not been confirmed.
What If EPS Contributions Are Missing?
EPFO has advised employees to contact their employers if eligible pension contributions are missing from their accounts.
If the employer fails to resolve the problem, employees can register complaints through the EPFO grievance portal, EPFiGMS.
The reported revision could particularly benefit new employees earning between Rs 15,000 and Rs 25,000 by expanding access to retirement savings, pension and insurance protection.
