Union Budget 2020: Minimum pension limit under EPS expected to rise by Rs 5,000 per month, check details here
New Delhi | Jagran Business Desk: The minimum pension of private sector employees is likely to rise under the new Employees Pension Scheme (EPS) in the upcoming budget 2020. A hike in pension is the demand of the union for quite a long time. It is likely be addressed by Union Finance Minister Nirmala Sitharaman in the budget set to be unveiled on February 1. She may raise the minimum pension from the existing Rs 1000 to Rs 6000 per month.
The government has about Rs 3 lakh crore of pension funds.
Unions say that while the government has made more pension available to unorganized employees, even businesspersons, there is no point in offering less pension to organized sector employees. Apart from increasing the pension limit, the old provision of commutation or advance partial withdrawal of EPS could be restored in the budget. Under commutation, employees have the right to collect certain amount of pension along with provident fund (PF) during retirement. However, it reduces monthly pension by 1/3rd for 15 years.
The system was discontinued in 2009, but in the last few days, EPFO has asked the government to restore it. The move is likely to benefit around 6.5 lakh employees. Apart from this, other measures to increase the income of private sector employees are also on the cards. All of them will raise the income tax exemption limit. But we will not discuss it here. Rather, we will look at steps related to Employees' Provident Fund (EPF) and Health Insurance, i.e, ESI.
Under this scheme, any announcement could be made about an investment the in EPF stock markets. There is also a possibility of allocating new ESI hospitals and dispensaries. The Ministry of Labor has recently formed a 'Satisfaction' cell to address the grievances of the employees.
Of an employee’s salary, 12 per cent goes to their EPF account every month, while 12 per cent of the employer's contribution is split into EPF (3.67 per cent) and EPS (8.33 per cent).
Posted By: James Kuanal