Context:
The interest rate for Provident Fund (PF) deposits for the upcoming financial year 2025-26 will be decided by the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO).
The present interest rate stands at 8.25%.
Workers’ Demand: Consider to add an increase in the interest due to the inflation & economic distress conditions.
The finalized recommendation will go to the Ministry of Finance for approval.
Implementation of the Supreme Court Directive on Increased PF Pension
- The November 2022 verdict from the Supreme Court authorized employees who meet eligibility conditions to seek a higher pension which is reflective of actual salary rather than determined by the salary ceiling for pensionable service.
- However, there has been widespread protest by EPFO regarding the pro rata calculation for pension.
- EPFO Position
- The basis for pro rata calculation is via Para 12 of the Employees’ Pension Scheme (EPS) which gives its stamp of approval to balance between pensioners under wage ceilings and those enjoying higher wages.
- The Supreme Court did not declare this provision as ultra vires.
- Current Standing
- Of higher pension applications filed, about 70% have been processed.
- Target: by March 31, 2025, completion of all applications.
- The CBT’s executive has instructed EPFO to expedite cases pending for major PSUs.
Changes Proposed in Employees Deposit Linked Insurance (EDLI) Scheme
- Current Situation
- Under the EDLI scheme, benefits are not paid in the case of death occurring within one month of joining.
- Proposed Changes
- At least a compensation of ₹50,000 to the family of the employee in the case of death.
- Greater compensation in the event of the death occurring within six months from joining.
- Objective
- To ensure that family remains financially secure even in the event of early demise of the worker.
Workers demand a higher interest rate, but final decision varies depending upon financial feasibility.
Implementation of a higher pension is being carefully monitored with the EPFO having a target of processing all cases by March 2025.
