New pension system to be introduced…

The Employees’ Provident Fund Organisation (EPFO) is reportedly moving towards introducing a new pension system as an alternative to the existing higher pension scheme. As per the new proposals, pension benefits for retired employees may be reduced. The proposed system is expected to be implemented either from September 1, 2014, or from the date of official announcement.

The proposal was submitted to the Central Board of Trustees in December 2024 and later forwarded to the Union Labour Ministry. A circular issued by EPFO indicated that the pro-rata pension calculation method would be implemented once government approval is received. It also mentioned possible reduction in pension payouts for those receiving higher pensions, with certain procedural approvals already granted at departmental levels.