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Contribution-based pension accounts for new EPFO subscribers soon

The move will help higher-income group workers to get higher pensions and is aimed at making the pension fund of the EPFO, which is in deficit, more sustainable

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Employees contribute 12 per cent of their wage (basic pay and dearness allowance) towards these schemes with a matching contribution of 12 per cent from employers.

Somesh Jha New Delhi

3 min read Last Updated : Sep 03 2020 | 11:43 PM IST

Formal sector workers may soon have their own pension accounts with the Employees’ Provident Fund Organisation (EPFO) that will have benefits linked to their own share of contribution, rather than from a pool of funds.

The move will help high-income group workers get higher pension and is aimed at making the pension fund of the EPFO, which is in deficit, more sustainable.

“…amendments in the EPS, 1995, (Employees Pension Scheme, 1995) has been formulated and recommended to the government for grant of pension on the basis of accumulations in individual pension accounts of the members,” showed documents reviewed by Business Standard.

The defined-contribution

Topics : EPFO pension accounts EPS scheme Pensions private sector

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