An official explained that the EPFO usually sends the pension disbursement detail to banks on the last working day of the month (in this case, it would have been March 31). The pension is credited to the subscriber's account in the first week of the following month. This timeline has been advanced now.
Earlier this month, the EPFO had issued a statement asking its subscribers to avail online for availing various facilities, including for their provident fund claims. The government offices have been operating with skeletal staff in a bid to avoid the spread of COVID-19 virus. Many private offices are either shut or have asked their employees to work from home.
The EPFO runs three schemes for private sector workers: The Employees’ Provident Fund scheme, the Employees’ Pension Scheme (EPS), and the Employees’ Deposit Linked Insurance Scheme.
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. Of this, 8.33 per cent of the employers’ share goes towards the EPS and the government further makes a contribution of 1.16 per cent of the wage to the pension account of workers.
At present, 8.33 per cent of wage up to Rs 15,000 a month is remitted to the EPS account of a worker. Workers with wage above Rs 15,000 a month who became part of the EPFO’s schemes after September 1, 2014, do not have a pension account.
The EPS fund is a pooled account with the EPFO with defined benefit for all beneficiaries who receive pension after attaining the age of 58 years with a condition that they have completed at least 10 years of service.
Under the EPS, workers get a monthly pension from the age of 58 years until death. The pension amount is based on a formula with pensionable salary being the monthly basic pay plus dearness allowance averaged over the last 60 months of a worker’s service.
After assuming power in its previous stint, the National Democratic Alliance (NDA) government had announced a minimum monthly pension of Rs 1,000 to all subscribers of the scheme, effective from September 2014. The move benefited around 1.8 million pensioners every year.