The pension plan of Employee Provident Fund Organization (EPFO) acts as a financial security arrangement for the millions of employees who will retire from work roles in India. This schematic arrangement becomes the base for regular pension payments to a spouse and nominee. With many major modifications under the EPFO pension scheme, 2024 brings some respite to millions of pensioners across the country.
Brief Introduction Of EPFO Pension Scheme
The Employees’ Pension Scheme (EPS) 1995, the pension scheme of EPFO, is meant to provide a regular income for employees engaged in organized sector jobs upon their retirement from the workforce. Contributions from the employee and employer form the pension fund under the provisions of this scheme. Recently, the minimum pension has been enhanced from ₹1000 to ₹2000 monthly, benefiting millions of pensioners.
New Rules Of Pension Scheme In 2025
This year, there have been many important changes made under the pension scheme by EPFO. Now there is the use of digital medium to submit Life Certificate by pensioners. The biggest facility is that only half of the monthly pension is deposited into the pensioner’s account, and half is withdrawn in cash at the PFO office. Apart from these, the pension benefits have been further increased for those who voluntarily retire at the age of 58 years.
How Is The Pension Amount Calculated?
Two formulas are used together for the computation of EPFO pension. First formula states: Pension = ( Pensionable Service x Pensionable Salary)/70. The second option offers a guaranteed minimum monthly pension of ₹ 2,000 for having a 20-year service time. Maximum pensionable salary has now also increased from ₹ 15,000 per month to ₹ 25,000 per month, which will also aid high-earning employees.
Online Pension Claim Process
EPFO has made this process completely digitalized. Henceforth an employee can apply online using EPFO’s website or via the UMANG app. Required documents include Aadhaar number, bank account details, photo, and withdrawal form 10 D. Now under new rules, pension settlement has been targeted for completion in 20 working days.
Special Benefits And Facilities
The scheme provides a widow/widower with a lifelong pension. Lifelong pension has been applied to disabled children as well. To add on according to the new rules, if a pensioner dies after receiving a pension for 10 years, his nominee will now continue receiving the pension for a period of 20 years. Also, the free medical facilities for pensioners are extended.
Future Plans And Improvements
This Pension Scheme is intended to be improved further by the EPFO. Enhancing mobile app facilities for the pensioners is being targeted for future needs. One of the suggested improvements is linking the pension amount to the Consumer Price Index (CPI) so that any increase in inflation will also increase the pension amount. The EPFO has also changed the pattern of investing pension funds to enhance returns.
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