Private sector employees are urging the government to address their pension concerns as it develops a Unified Pension Scheme (UPS) for public sector workers. Currently, private employees covered by the Employees Provident Fund Organisation (EPFO) receive a minimal pension through the Employees Pension Scheme (EPS). They are advocating for a substantial increase in their monthly pension.
The Chennai EPF Pensioners Welfare Association recently sent a letter to Union minister Mansukh Mandaviya, requesting an increase in the minimum pension from the current amount to Rs 9,000. The EPS scheme currently covers approximately 75 lakh employees nationwide. The association argues that while 23 lakh central employees will benefit from the new UPS, private sector workers under EPS 1995 also deserve enhanced support.
The Chennai EPF Pensioners Welfare Association urge the pension issue be brought directly to Prime Minister Narendra Modi’s attention. This follows a protest by the National Agitation Committee of EPS-95 in Delhi this past July, which sought to raise the minimum pension to Rs 7,500. This committee represents around 78 lakh retired pensioners from Maharashtra and also advocates for the 7.5 crore industrial sector employees across the country.
Currently, under the EPS 1995 scheme, the minimum pension is set at Rs 1,000, a figure established by the Centre in 2014. Last year, the Labour Ministry proposed increasing this amount to Rs 2,000, but the Finance Ministry has yet to approve the change.
Under the Employees Pension Scheme (EPS), pensions are calculated using a specific formula. The pension amount is determined by multiplying an employee’s basic salary by their total years of service and then dividing the result by 70. For example, if an employee’s basic salary is Rs 50,000 and they have worked for 30 years, the calculation would be as follows: (50,000 x 30) / 70 = Rs 21,428.
Regarding contributions, private sector employees contribute 12% of their basic salary to the Employees Provident Fund (EPF) each month. Employers match this contribution with an additional 12%. Out of the employer’s 12% contribution, 8.33% is allocated to the EPS pension fund, while the remaining 3.67% is deposited into the employee’s EPF account.
Currently, the PF deduction applies to salaries starting at Rs 15,000, with a proposal from the Labour Ministry suggesting an increase to Rs 21,000, which could potentially offer greater benefits to private sector employees.
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