It gives the private sector employees a breathing space because EPFO is almost going to implement salary and pension increases in the forthcoming year 2025, especially with the fresh demand for social security measures and retirement benefits that aim toward the financial welfare of millions of working professionals across the country.
Salary Revision Eventually Links To Higher Contribution Made Toward EPF
New reports predict EPFO may alter the salary ceiling that sets the monthly contributions made toward the Employees’ Provident Fund (EPF) and, the Employees’ Pension Scheme (EPS). At present, the wage ceiling towards the EPF contribution stands at ₹15,000 per month, which is slated to either go up to ₹21,000 or ₹25,000, regarding the final government approval.
With this change, that means a reduction of income for the depreciation account and an increase in the EPF retirement savings. The employers, in turn, will also have to match those contributions, which ultimately will increase enormously the total savings for the employee.
Increase In Pension Under EPS
In addition to the salary increase, there is also good news on the front of pensions. The government has suggested raising the minimum monthly pension under EPS from ₹1,000 to ₹7,500, a long-pending demand among pensioners and trade unions. This will go a long way in benefitting retired employees, especially from the private sector, who continue to receive such paltry pensions after years of service.
Impact On Private Sector Employees
However, the new changes mainly happen to be beneficial to employees working in small and medium-sized enterprises (SMEs) where salaries are most probably closer to the statutory limits. Increase in the salary ceiling will in turn lead to increased EPF deductions and hence give them more robust long-term benefits. It will also boost savings towards a financially secure retirement.
Implementation Schedule
The proposal is under consideration and is likely to be approved by the middle of 2025. Upon approval, the new salary and pension limits will be put up by the Ministry of Labour and Employment and EPFO will start to implement these changes all over India.
Also Read: Gratuity Rules Changed By High Court: Big Relief And Higher Payouts For Employees