Major Developments in EPFO: Enhanced Benefits, Digital Reforms, and Higher Pension Updates
Minimum Insurance Benefit Under EDLI Increased to ₹50,000
The Employees' Provident Fund Organisation (EPFO) has approved an increase in insurance coverage under the Employee Deposit Linked Insurance (EDLI) scheme. If an EPFO member passes away within one year of employment, their family will receive a minimum insurance benefit of ₹50,000. This move aims to provide better financial security to dependents. Additionally, a two-month gap between jobs will now be considered as continuous service, ensuring uninterrupted benefits under the scheme.
Huge Liability in Disbursing Higher Pension
EPFO has estimated a substantial financial liability of ₹1.86 lakh crore for providing higher pensions to eligible employees. A recent actuarial analysis highlighted a funding shortfall, with ₹9,500 crore required immediately. However, trade unions and pensioners' activists argue that EPFO is exaggerating the liabilities to delay or limit higher pension disbursements. They insist that the Supreme Court’s verdict mandates the provision of a higher pension based on actual wages, not capped wages.
Banking-Like Services for EPFO Members by June 2025
EPFO is working towards implementing a centralized IT system (EPFO 3.0), which will allow members to access banking-like services through their PF accounts. This initiative, expected to be fully operational by June 2025, will enable features such as automatic withdrawals and online transactions similar to banking systems. The move aims to enhance transparency and efficiency in fund management.
Minimum Pension Likely to Increase to ₹3,000
The Central Government is considering raising the minimum pension under the Employees' Pension Scheme (EPS) to ₹3,000 per month from the current ₹1,000. The last revision occurred in 2014, increasing the pension from ₹500 to ₹1,000. Additionally, Ayushman Bharat health insurance benefits may be extended to pensioners aged 60 and above, ensuring better healthcare access.
Higher Pension for Option-Choosers from April-May 2025
Employees who opted for higher pension contributions under EPS 1995 will start receiving increased pensions from April-May 2025. EPFO aims to process all pending applications by March 31, 2025. So far, 22,000 retirees have started receiving higher pensions, while over 17 lakh applications are under review.
Aadhaar to Be the Sole Identifier for EPF Accounts
EPFO's new IT system will issue a single Universal Account Number (UAN) per Aadhaar card, eliminating duplicate UANs. This reform will streamline account management, prevent fund duplication, and improve accessibility for employees. The initiative also includes online facilities for updating UAN details and merging multiple accounts.
