EPFO Minimum Pension Hike: Will Govt Approve ₹7,500 Minimum Pension Demand?

Private sector employees under the Employees’ Provident Fund Organisation (EPFO) have long sought an increase in their minimum pension, which has remained at ₹1,000 per month since 2014.

Under the current system, EPF members contribute 12% of their basic salary towards the provident fund, with employers matching this contribution. Of the employer’s share, 8.33% is allocated to the Employees’ Pension Scheme (EPS), while 3.67% goes towards the EPF scheme.

EPS-95 Pensioners Seek ₹7,500 Minimum Pension 

Ahead of Budget 2025, a delegation of EPS-95 retirees met Finance Minister Nirmala Sitharaman to push for their long-standing demand of a minimum pension of ₹7,500 per month plus dearness allowance (DA).

The EPS-95 National Agitation Committee stated that the finance minister assured them that their demands would be considered with sympathy. Pensioners have been campaigning for over seven to eight years, urging the government to increase the pension amount while also seeking DA benefits and free medical treatment for retirees and their spouses.

EPFO CBT Meeting Scheduled for February 28 

The demand for a pension revision gains significance as the Central Board of Trustees (CBT) of EPFO is set to meet on February 28, 2025, to finalise the interest rate on provident fund deposits for FY 2024-25.

While discussions on the interest rate will be a primary focus, the issue of pension enhancement is also expected to be a major topic. Many pensioners and advocacy groups argue that the current ₹1,000 pension is inadequate, especially considering inflation and rising medical expenses.

With mounting pressure from retirees, all eyes are on the upcoming CBT meeting, which could determine the future of pension benefits for millions of employees.

Government Considering Fixed Interest Rate for EPFO 

In a separate development, the central government is reportedly evaluating a proposal to introduce a fixed interest rate for EPFO subscribers, ensuring stable returns despite market fluctuations.

This move aims to provide financial security to subscribers and mitigate concerns over unpredictable returns.

Interest Stabilisation Fund Under Consideration 

According to the news reports, the government is exploring the creation of an interest stabilisation reserve fund to maintain a steady interest rate, regardless of investment performance.

The proposal is currently in the early stages, with the Ministry of Labour and Employment conducting an internal study to assess its feasibility.

EPFO Interest Rate for 2024-25: Potential Revision Expected 

Multiple media reports suggest that the EPFO may revise the interest rate for provident fund deposits for 2024-25. The rate is likely to be set between 8% and 8.25%, maintaining consistency with the previous financial year (2023-24).

237th CBT Meeting: Key Decisions on Interest Rate 

The Central Board of Trustees (CBT), chaired by the Union Minister for Labour and Employment, is EPFO’s highest decision-making body. It comprises representatives from employer associations, trade unions, and government officials from both central and state governments. The interest rate proposal follows a structured approval process:

• EPFO proposes the rate
• CBT reviews and approves it
• Finance Ministry grants final clearance
• Approved interest is credited to EPFO subscribers’ accounts

EPFO Interest Rate in Previous Years 

For FY 2023-24, the EPFO had set the interest rate at 8.25%, marking an increase from 8.15% in 2022-23. The upcoming CBT meeting will determine whether the interest rate remains unchanged or is further increased.

Conclusion

With discussions on pension revision, interest rate stability, and potential rate adjustments, the February 28 CBT meeting will be crucial for millions of EPFO subscribers. The final decision will impact both pensioners seeking better financial security and active employees looking for stable returns on their provident fund savings.

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