Minimum Salary of PF Member : Under Employees Provident Fund Organization (EPFO), the minimum salary of PF account holders (PF Account Holder Minimum Salary) is 15 thousand rupees.
It is discussed that now a plan is being made to increase it to 21 thousand rupees. According to a report, if the government does this, the amount of contribution to the pension (EPS) of the employees will be affected. Along with this, the amount of PF can also increase.
Last time, the government increased the minimum salary of the employees in September 2014. Now once again the salary of these employees can be increased. According to the report of The Economic Times, if the salary increases, then their PF contribution will also increase and those who invest in Employees Pension Scheme (EPS), their contribution may also increase.
How much pension contribution will increase
Currently, contribution to the Employees’ Pension Scheme (EPS) account is calculated by capping the basic salary at Rs 15,000 per month. Hence the maximum contribution to the EPS account is up to Rs 1,250 per month. If the government increases the salary limit to Rs 21,000, then this contribution will increase. “The monthly EPS contribution will come to Rs 1,749 (8.33% of Rs 21,000),” says Mallika Noorani, senior partner, Nirman Law & Associates.
Will get more pension on retirement
After this increase, the employees will be given more pension on retirement. If the pensionable service period of an employee is 32 years, then the monthly salary will be calculated by taking the average salary of 60 months preceding the retirement. However, if the basic pay of the employee exceeds Rs 15,000 per month during 60 months, then Rs 15,000 will be considered as one month’s pay for computing pension.
Also, if the employee has worked for 20 years, then if an employee has worked for more than 20 years, then 2 years will be added as bonus to the service period. Now the monthly pension received by the EPS member will be Rs.7286. On the other hand, if the salary increases, then the employees will also be eligible to contribute to EPS.
