The Centre has lifted the ceiling of Rs.15,000 per month for calculating pensionable salary.
A new notification from the Ministry of Labour and Employment said that pensionable salary of an employee who opts for ‘fresh option’ would be based on a higher salary.
“The new rule says employees who opt for the scheme of higher salary as the basis for calculation of pensionable salary would get higher pension.
However, how it would work and its implications would be known only after study of the rules,” Gurudas Dasgupta, General Secretary of the All India Trade Union Congress (AITUC) and Former Parliamentarian, told The Hindu .
The gazette notification by the Ministry of Labour dated July 1 detailed the new amendment to the Employees’ Pension Scheme, 1995.
In August 2014, the government had made two major amendments to the Employees’ Pension Scheme wherein the minimum pension was fixed at Rs.1,000 per month and the ceiling for the purpose of pensionable salary was raised from Rs.6500 to Rs.15,000.
Employer contributionAn employee’s pension is financed by diverting 8.33 per cent of employer’s monthly contribution to the Employees Provident Fund (EPF).
Prior to the new rule, the monthly contribution to EPS was restricted to 8.33 per cent of Rs.6,500 or Rs.541 per month and after October 2014, Rs.1,250 or 8.33 per cent of Rs.15,000.
The maximum monthly pension was restricted to Rs.3,250. An employee can start receiving lifelong pension under EPS only after rendering a minimum service of 10 years and attaining the age of 58 years.
