No Plan to Link EPS Pension with Full Salary: Govt

GG News Bureau
New Delhi, 31st March: The Centre has clarified that there is currently no proposal to calculate pension under the Employees’ Pension Scheme (EPS) based on an employee’s actual salary beyond the existing ₹15,000 wage ceiling.

Union Labour and Employment Minister Mansukh Mandaviya made the statement in the Lok Sabha while responding to a query by MP Giridhari Yadav.

The clarification means that the pension formula for subscribers of the Employees’ Provident Fund Organisation remains unchanged, with benefits continuing to be calculated within the current wage cap framework.

Under existing rules, the pension component is linked to a maximum salary of ₹15,000 per month. Contributions to the pension fund include 8.33% of employer contributions and 1.16% support from the central government, both capped at this wage limit.

The EPS operates as a combined contribution-benefit system, where a common fund is built during an employee’s service period and pension is calculated using a standard formula based on pensionable salary and years of service.

The announcement comes amid long-standing demands from employees and pensioners seeking a revision in the wage ceiling and an increase in the minimum monthly pension, currently set at ₹1,000.

Officials indicated that unless there is a policy change in the future, pension calculations will continue under the existing structure.

For salaried employees, the update confirms that retirement benefits under EPS will not be linked to full salary levels at present.