Central Board of Trustees of Employees’ Provident Fund Organisation (EPFO) has given green light to Employees’ Pension Scheme (EPS)-2026. Out with controversial clause from EPS-1995. It let employees,employers opt for higher pension if contributions topped ₹15,000 monthly. New scheme aligns with Code on Social Security,in effect since last November.
Paragraph 11 (4) of EPS-1995,which limited choice of higher pension contributions to one year,now deemed “obsolete” per official document from March 2 Board meeting. Originally inserted during August 2014 changes,it replaced an older rule that allowed unlimited higher pension options.
Pensioners,EPS contributors voiced concerns about missing this option in 2014-15 due to authorities' cut-off date reading. November 2022,Supreme Court backed them,allowing higher pension applications from Provident Fund contributions .
By January 31,2025,government informed Lok Sabha about 15.24 lakh applications filed by employees,pensioners . Most processed,with 3.93 lakh demand letters dispatched. Nearly 2.33 lakh paid or consented,while 1.24 lakh received pension payment orders .
EPFO long resisted higher wage pension calls,arguing EPS-1995 was designed for weaker workers who contributed more proportionately than high earners. Called higher wage pension “reverse subsidy,” saw it causing imbalance. 2014 changes aimed to correct this .
EPS-2026 skips higher wage pension provision,but new Employees Provident Funds Scheme allows joint employee-employer requests for contributions above ceiling. Paragraph 9 (iv) ensures employees can still make extra contributions. Paragraph 19 addresses “additional voluntary contributions” by employees,though employers not obliged to facilitate.
Changes in EPS echo EPFO's ongoing tweaks to align with shifting social security rules,meet contributors' needs. How will new scheme reshape pensions,employee contributions as it unfolds…?
