Govt mulls EPS reform to boost employees' pension: Here's what we know

The labour ministry is considering to revamp the Employees’ Pension Scheme 1995 (EPS-95), allowing greater contributions by employees for higher retirement benefits, according to multiple reports.

Under the current framework, the entire employee contribution of 12% of basic salary goes to the Employees' Provident Fund (EPF), while the employer’s contribution is split — 8.33% to the employees’ pension scheme and 3.67% to the provident fund.

The proposed changes would provide employees the option to allocate a larger share of their contributions towards the pension scheme.

Members will get more pension if they contribute more to their EPS-95 account, reported PTI quoting a person aware of the matter.

Therefore, the ministry is weighing options to allow a higher contribution towards EPS, according to the report.

The move is reportedly part of government efforts to enhance social security benefits.

However, TN Karumalaiyan, general secretary of the Centre for Indian Trade Unions (CITU), stressed that the government should first consider increasing the wage ceiling of ₹15,000, which will automatically increase the share of contributions going towards both the provident fund and the pension scheme, HT reported.

The government is also focusing on job creation in the country and has approved major infrastructure projects worth Rs 4.19 lakh crore, according to the PTI report.