The Employee Pension Scheme (EPS) was intended for provision of pension for the employees after their retiments. A potential huge pension increment for retired civil servants is in the offing 2024 due to new legal and policy reforms by the governments. These updates are important, particularly after recognising the Supreme Court decision that allows employees may demand higher pensions based on real salaries not a fixed sum.
Background of the Pension Hike
The government has brought changes in pension formula which has given an opportunity to employees to take advantage of improved pension for them. It may apply to those who have contributed more than the minimum amount required to the EPS for their increased payments. The pension increase is intended to close the gap between the employee contributions and their pension received as a result of their working years.
Pension scheme and the qualification criteria for the same
The current pension scheme for the employees is called the EMPRO (Employee Pension Scheme) and was launched in 1995. The upper limit for pension has now been fixed at ₹15,000 per month with employer, employee contributions at actual salary at 8.33 percent. Those who are interested in the higher pension are required to have been contributing to the EPS since 2014, and should file their joint option form by July 11, 2023.
The pension calculation formula has also been adjusted, where the pension is determined by the formula: As per formula average salary multiplied by the number of services rendered divided by 70, the average salary was 14700. This is to ensure that pension amount is more reasonable where someone has served at higher salaries throughout his/her working years.
Changes in rules and regulations in last few years
Some of the aspects of Civil Service Reform Program would have a large impact on the personnel of state agencies. For example, it is possible to voluntarily retire after reaching 20 years of service, and, if the dismissal is mandatory or took place, the employee will be paid the accumulated pension. Through these changes, it is expected that the employees will be embraced adequate financial security during their essential and later stages in life.
