New Delhi: Additional contribution of 1.16 per cent of basic wages for subscribers opting for higher pension will be managed from employers' contributions to social security schemes run by retirement fund body EPFO. "It has been decided to draw 1.16 per cent additional contribution from within the overall 12 per cent of the contribution of the employers into the provident fund," a labour ministry statement issued late in the evening on Wednesday said.
The ministry said that the spirit of the EPF & MP Act as well as the Code (Code on Social Security) do not envisage contribution from the employees into the pension fund. At present, the government pays 1.16 per cent of basic wages of up to Rs 15,000 (threshold basic wage) as subsidy for contribution towards Employees Pension Scheme (EPS). The employers contribute 12 per cent of basic wages towards social security schemes run by the EPFO.
As much as 8.33 per cent out of the 12 per cent contributed by the employers goes into the EPS and the remaining 3.67 per cent is credited into the Employees Provident Fund. Now all those EPFO members who are opting to contribute on their actual basic wage which is higher than the threshold of Rs 15,000 per month for getting higher pension, will not have to contribute this additional 1.16 per cent towards EPS.