Indian Government Plans to Double Wage Ceiling for Employees Provident Fund (EPF) and Employees State Insurance Corporation (ESIC)

• The government plans to double the monthly wage ceiling for mandatory deductions from salaries for contribution to the Employees Provident Fund (EPF).
• The wage ceiling refers to the salary threshold up to which it is mandatory for a worker in an establishment covered under the EPFO or ESIC to make monthly contributions.
• The last wage ceiling revision for the EPFO took place in 2014.
• The board deliberated on bringing people who earn beyond the mandatory wage cap and opting out within the ambit of the social security organization.
• The board gave its final nod to the centralized pension payment system (CPPS), which will be implemented on January 1, 2025.

Centralized Pension Payment System (CPPS)

• Sanctioned the central payment system of Employees Pension Scheme, 1995
• Involves a landmark shift which introduces national-level centralized payment mechanism at all centre-head points across the country.
• The system will benefit over 78 lakh pensioners under EPS and also bring smooth and hassle-free delivery.
• Pension Payment Orders will not be required, the CPPS will enable pension payments across India.
• The facility will be rolled out on 1st January 2025 under EPFO’s IT modernization project Centralized IT Enabled System (CITES 2.01).
• The CPPS is expected to bring down the cost of pension disbursal.