Workers in unorganised sector might be able to invest in EPFO Pension Scheme soon: Report

Under the new scheme, superannuation pension, widow pension, children pension, and disability pension will be provided to account holders but the minimum qualifying period will be raised to 15 years from the current 10. There will need to be a minimum contribution of Rs 5.4 lakh in the pension account to receive Rs 3,000 as a monthly pension upon superannuation.

“The minimum accumulation of approx. Rs 5.4 lakh is required for a minimum of Rs 3,000 pension per month. Members can choose to contribute more voluntarily and accumulate a significantly larger amount for a higher pension,” said an ad-hoc committee, set up by the Central Board of Trustees (CBT), EPFO’s highest decision-making body, reported Financial Express.

EPFO added that under the new scheme account holders would find it easier to switch between formal and informal employment to continue the scheme. Currently, establishments with more than 20 workers need to mandatorily contribute to the EPF for those workers who earn less than Rs 15,000 a month in basic salary. The employee and the employer contribute 12 percent of the basic wage to the EPF scheme, to a maximum of Rs 1,250 per month.