EPFO 3.0: If you are also a salaried class and your salary is deducted for PF every month, then this news is for you. Yes, the government is taking continuous steps for the convenience of employees. On one hand, news is coming that the Labor Ministry is preparing to change the PF contribution. The effect of this will be that employees’ pensions will increase after retirement.
There are reports that the government is planning EPFO 3.0
Additionally, there are reports that the government is planning EPFO 3.0. Under this, subscribers may be provided with several new facilities. A report from CNBC Awaaz claims that the government may announce the EPFO 3.0 plan in line with PAN 2.0. This will include increasing employees’ pension contributions and providing employees with the facility to withdraw PF money from ATMs. The Labor Ministry is planning to issue a card for the convenience of PF subscribers, which will allow them to withdraw PF money from ATMs in the future. This plan may be implemented by May-June next year.
Employee groups have been consistently requesting for a rise in the pension funds provided by EPFO. With this in consideration, the Labor Ministry might permit EPFO members to increase their contributions in order to receive a higher pension. For this reason, the ministry is contemplating alterations to the Employee Pension Scheme 1995 (EPS-95). At present, 12 percent of the EPFO member’s basic salary is placed into the EPF account, with the employer also obligated to match this contribution. 8.33 percent is allocated to EPS-95, with the remaining 3.67 percent being placed in the EPF account.
Additional contributions to the EPS-95 account will impact the future pension
Making additional contributions to the EPS-95 account will impact the future pension. Hence, the Labor Ministry is contemplating the possibility of permitting increased contributions to EPS. Workers might be allowed to increase their contributions to EPS-95 in order to boost their pension benefits following the revisions. Certain media sources have suggested that the government is also exploring the possibility of eliminating the 12 percent cap on PF contributions. Beneath this, additional amenities may be offered to employees who receive a salary.
There are suggestions that employees could have the choice to donate based on their savings. With this, employees can exceed the set limit when depositing money into their EPFO account. Nonetheless, the employer’s input will still be calculated according to the employee’s salary.