EPFO Prepares Plan to Lift Mandatory EPF/EPS Salary Cap to Rs 25,000

Overview

• If approved, the revision is projected to bring more than one crore additional employees under provident fund and pension coverage.
• Currently, workers with basic pay up to Rs 15,000 must be enrolled, while those above that threshold can be excluded at an employer’s discretion.
• Department of Financial Services secretary M. Nagaraju described the coverage gap for employees earning just above the cap as a serious concern.
• Both employers and employees contribute 12% of basic pay to EPF, so a higher cap would raise contributions and potential retirement benefits while increasing employer costs.
• Separately, ten central trade unions requested a Rs 9,000 minimum EPS pension linked to DA, restoration of the Old Pension Scheme with scrapping of NPS, regularisation of scheme workers, and a government social-security fund financed through higher corporate, wealth and inheritance taxes.