Another major update is here for EPFO members. There has been a persistent call to raise the minimum pension for private sector employees under the EPFO. Back in September 2014, the central government set a minimum pension of Rs 1,000 per month for those receiving benefits from the Employees’ Pension Scheme (EPS) managed by the EPFO.

 

In the EPF system, employees contribute 12% of their basic salary to the Provident Fund, with employers matching that contribution. Of the employer’s share, 8.33% goes to the EPS, while 3.67% is allocated to the EPF account.

 

What are EPFO members asking for?

The EPS-95 Agitation Committee, representing pensioners, has reported that Union Labour Minister Mansukh Mandaviya has promised to address their requests, including the minimum pension under EPS-95. The committee stated that the central government is taking a favorable approach to the long-standing issues faced by over 78 lakh pensioners under the EPFO nationwide.

 

In addition to raising the minimum EPS pension, the pensioners’ group is also advocating for free medical services for retirees and their spouses, as well as corrections to mistakes in applications for enhanced pension benefits.

 

The committee noted that the minister assured them of a prompt resolution to these matters. The EPS-95 National Agitation Committee (NAC), which has been advocating for pensioners’ rights for years, expressed optimism that after recent talks with the government, the minimum pension under EPS-95 might finally see an increase after a decade.

 

Will the minimum pension rise in 2025?

As the Budget 2025 approaches, a group of retired EPS-95 employees met with Finance Minister Nirmala Sitharaman to press for an increase in the minimum pension to Rs 7,500 per month, along with the inclusion of Dearness Allowance (DA). The EPS-95 National Movement Committee reported that the Finance Minister assured them their requests would be taken into account.

 

For the past 7-8 years, pensioners have been persistently advocating for an increase in their pensions. They are requesting that the current pension of Rs 1,000 be raised to Rs 7,500, including the benefit of Dearness Allowance (DA). Additionally, they seek free medical services for retired employees and their spouses.

 

What can we expect in the upcoming EPFO meeting?

The Central Board of Trustees (CBT) of EPFO is set to convene on February 28, 2025, to determine the interest rate for Provident Fund deposits for the financial year 2024-25. While the primary focus of this meeting will be the interest rate, the topic of pension increases may also be a significant point of discussion.

 

Pensioners and social advocates who have long contributed to the EPF are expressing that the current pension amount is inadequate. They argue that, given the rising inflation and increasing medical costs, the monthly pension of Rs 1,000 is far too low. The pressure on the government to address this longstanding demand for a pension increase is mounting. All eyes are now on the upcoming CBT meeting, where a crucial decision regarding pension adjustments could be made.

 

Will a fixed interest rate be introduced for EPFO?

The government is contemplating a fixed interest rate scheme for EPFO account holders, ensuring they receive consistent returns regardless of stock market fluctuations.

 

Is the government planning to establish an interest stabilization fund?

According to various reports, the government is exploring the creation of an Interest Stabilization Reserve Fund for EPFO. This fund aims to provide account holders with a stable interest rate, regardless of investment performance. The Ministry of Labor and Employment is currently assessing the feasibility of this initiative.

 

 

What will the EPF interest rate be for 2024-25?

 

Media reports suggest that the EPFO might set the EPF interest rate between 8% and 8.25% for the financial year 2024-25.

 

What major decisions are anticipated in the CBT meeting?

 

The Central Board of Trustees (CBT) of the EPFO, led by the Union Minister of Labour and Employment, serves as the top decision-making authority of the organization. It includes representatives from employer groups, trade unions, and officials from both central and state governments.

 

Here’s how the interest rate is determined:

 

1. EPFO proposes the interest rate.

2. The CBT reviews and approves this proposal.

3. It then receives final approval from the Finance Ministry.

4. Once approved, the interest is credited to the accounts of EPFO members.

 

EPF interest rate for 2023-24

 

For the financial year 2023-24, the EPFO increased the interest rate from 8.15% in 2022-23 to 8.25%. The upcoming CBT meeting will decide if there will be any changes to the interest rate. This meeting is crucial for EPFO account holders, as it may bring significant announcements regarding the Provident Fund.