In a big move to help low-income salaried workers, the Employees’ Provident Fund Organisation (EPFO) has announced a new update that could increase monthly pensions. This is especially for employees earning ₹15,000 per month. The new rule allows employees to get a higher pension after retirement by contributing more to the Employees’ Pension Scheme (EPS) based on their actual salary. Here’s everything you need to know.
What is the New EPFO Pension Rule?
Earlier, EPFO calculated pension on a maximum salary limit of ₹15,000 per month. Now, employees can contribute based on their actual salary, even if it’s more than ₹15,000. This means their future pension will also be higher.
This decision follows court rulings and government clarifications to make pension benefits fair for all subscribers.Who Can Apply for the Higher Pension?
Not all EPFO members are automatically eligible. You must meet the following conditions:
- You must have been an EPFO member on or before 1st September 2014
- Your salary at that time was above ₹15,000, but your pension was calculated using the ₹15,000 limit
- Both you and your employer contributed to the EPS scheme
- You must apply online through the EPFO unified member portal
If you meet these points and apply in time, you can get a much better pension amount after retirement.
Benefits of Choosing the New Pension Model
Opting for the higher pension scheme offers several advantages, especially for private sector workers who rely on their pension after retirement.
Key Benefits:
- Monthly pension could rise to ₹7,500–₹9,000 or even more
- Better financial security after retirement
- Pension is guaranteed by EPFO for life
- Helps build a stable source of income for senior citizens
Sample Pension Calculation Based on ₹15,000 Salary
| Years of Service | Monthly Pension (Approx.) |
|---|---|
| 10 years | ₹2,143 |
| 20 years | ₹4,286 |
| 30 years | ₹6,429 |
| 35 years | ₹7,500 |
If your salary is ₹25,000 per month, and you work for 30 years, the pension may go up to ₹10,714 per month.
How to Apply for the Higher Pension?
EPFO has made the application process online. Here’s how you can apply:
- Visit the EPFO Unified Portal
- Choose the option “Pension on Higher Salary”
- Fill in your work and salary details
- Upload proof showing salary above ₹15,000 and the joint option form (if needed)
- Submit the application and wait for approval from EPFO
Make sure to apply before the deadline. Delays can cause problems in getting this benefit.
What About Employers?
Employers also have a role in this process. They may need to verify old salary records and contributions. Some companies might also have to recalculate past payments and contribute more towards EPS. A joint declaration may be required from both employer and employee.
Challenges and Common Problems
Many employees are still confused about this new option. Some of the common issues faced include:
- Difficulty in getting old salary and PF records
- Unclear calculation methods used before 2014
- Delays in EPFO portal updates and approvals
- Lack of awareness about how to apply or what documents are needed
It’s important to consult your employer or a financial advisor if you are unsure.
What Experts Are Saying
According to financial experts, this update is a golden chance for employees to increase their retirement income. But they advise employees to review their PF history carefully and make sure all records are correct before applying.
Should You Go for Higher Pension?
If your salary was more than ₹15,000 per month before September 2014, and you plan to work long-term, opting for the higher pension may be a great choice. It will give you better monthly income in retirement. But check your records, speak to your employer, and apply only if you are eligible.
Conclusion
The EPFO pension update is a welcome step towards giving more financial security to low-income and private sector workers. If you act in time and meet the eligibility rules, you can enjoy a much higher pension after retirement. Keep yourself updated and don’t miss the chance to secure your future.