Not just government employees, but private sector employees are also set to receive a major benefit before the new year.
The government has announced plans to increase the pension of private employees. Recently, the UPS system was implemented, which benefited only government employees.
Meanwhile, private sector employees have been waiting for similar updates.
Now, it is being reported that the government is likely to approve an increase in the basic salary for Employees’ Provident Fund Organization (EPFO) members.
This move could result in private sector employees receiving a pension of up to ₹10,500 per month after retirement.
Proposal to Raise the Salary Limit
The Ministry of Labor has sent a proposal to the Finance Ministry to increase the pension calculation limit.
Currently, pensions are calculated based on a salary cap of ₹15,000, but the proposal suggests raising this limit to ₹21,000.
Since 2014, the ₹15,000 limit has been in place, and many have demanded an increase.
If approved, this change could significantly boost employees’ monthly pensions. Private sector workers could enjoy a better financial future post-retirement.
Impact on Monthly Salaries
If this proposal is implemented, a larger portion of employees’ salaries will go into EPFO contributions. This means a slight reduction in take-home pay each month.
However, this sacrifice would lead to better pension benefits. For instance, if the salary limit is raised to ₹21,000, employees could see an additional ₹2,550 in monthly pension benefits after retirement.
