New Delhi: Retirement fund body EPFO has asked its field staff to take steps for enforcing government's decision of raising wage ceiling to Rs 15,000 to cover the organised sector workers under the social security net.
The staff has also been asked to take steps for providing minimum monthly pension of Rs 1,000 under its schemes.
The Employees' Provident Fund Organisation's (EPFO) office order stated clearly that the gazette notifications regarding the two decisions "are likely to be issued very soon".
In the Budget 2014-15 speech, Finance Minister Arun Jaitley had announced that the wage ceiling for coverage of workers in organised sector under social security schemes run by the EPFO would be raised to Rs 15,000 per month, from Rs 6,500, and the minimum monthly pension of Rs 1000 would be provided under the Employees' Pension Scheme 1995 (EPS-95).
According to the office order, the pensionable salary for calculating the pension shall be the average of the monthly pay drawn during the contributory period of service in the span of 60 months preceding the date of exit from the membership of Employees' Pension Fund.
The EPS-95 scheme provides that a subscribers can be member up to the age of 58 year.
Under the new arrangement, the pensionable salary shall be calculated on pro-rata basis for the period up to the date of notification - where wage ceiling is Rs 6,500, and for the subsequent period where the wage ceiling is Rs 15,000 per month. Similarly the (PF) withdrawal benefits shall be based on weighted of wages at different wage ceilings.
The office order further asked the field staff to obtain fresh option for contribution on higher basic wages than prescribed basic wage ceiling.
At present, certain employees are drawing more basic wages than wage ceiling of Rs 6,500 per month and opt to contribute on their higher basis wage.
As per the circular, the fresh option to contribute on higher wages in view of new wage ceiling, is to be exercised in six months.
All those members who would not opt for higher contribution afresh, there contribution over the new wage ceiling would be diverted to their PF account along with the declared rate of interest.
The EPFO order also state that the minimum pension for members, widow(er)/nominee/dependent parent shall be Rs 1,000 per month and accordingly the minimum children and orphan pension will also increase proportionately to Rs 250 and Rs 750 respectively.
According to the EPFO estimates, raising of wage ceiling would bring 50 lakh more workers under the coverage of social security schemes run by EPFO and entitlement of Rs 1,000 monthly pension would benefit 28 lakh pensioners immediately including five lakh widows.
First Published: Wednesday, July 23, 2014, 16:37