EPFO mulling over providing better-fixed pensions under new pension scheme; self employed, private employees to also benefit

Employee Pension Scheme: Employees' Provident Fund Organisation (EPFO) ​​is planning a new pension scheme for the purpose of providing better-fixed pensions to the people. There is a constant demand to increase the minimum pension under the Pension Scheme-1995 and no decision has been taken yet regarding this. The matter is also pending in the Supreme Court. 

EPFO ​​is preparing to bring a new fixed pension scheme. The amount of fixed pension will be decided by the contribution made. You will have to contribute according to the pension you want.

Under the new scheme, there will be an option to choose the fixed pension amount. Self-employed and private employees will also be able to register in this. The amount of pension will also be decided on the basis of salary and the remaining length of service.

EPFO ​​is preparing for the option of Employee Pension Scheme-1995. The existing amount in EPS is completely tax-free. But, the minimum pension in it is very less. The limit is only up to Rs 1250 on the basis of the month. In such a situation, there is a preparation to give an option to the employed person for the facility of more pension.

What is the present rule in EPS?

When an employee becomes a member of the Employee Provident Fund (EPF), then he/she also becomes a member of EPS. The contribution of 12% of the basic salary of the employee goes to PF. Apart from the employee, the same part also goes to the employer's account. But, a part of the contribution of the employer is deposited in the EPS ie Employee Pension Scheme. The contribution of basic salary in EPS is 8.33%.