But now, EPFO subscribers may soon get easier access to their provident fund savings in EPFO 3.0 Latest Update, with the Employees' Provident Fund Organisation planning to introduce ATM and UPI-based withdrawal facilities.

The new system is expected to simplify the process of accessing PF money and reduce dependence on lengthy claim procedures.

According to reports, the facility may be rolled out by the end of this month as part of the government's next-generation EPFO reform measures. The labour ministry has reportedly completed most of the groundwork required for the launch.

Once implemented, Employees' Provident Fund Organisation members may be able to withdraw a portion of their PF balance directly through ATMs, similar to regular bank transactions.

In addition, UPI-enabled withdrawals are also likely to be introduced, allowing subscribers to transfer funds instantly through digital payment platforms.

EPFO Minimum Pension Hike

Private sector employees under the Employees' Provident Fund Organisation (EPFO) have long been demanding an increase in their minimum pension, which has remained Rs 1,000 per month since 2014.

EPF members contribute 12 per cent of their basic salary towards the provident fund, with employers matching this contribution. Of the employer's share, 8.33 per cent is allocated to the Employees' Pension Scheme (EPS), while 3.67 per cent goes towards the EPF scheme.

Ahead of Budget 2025, a delegation of EPS-95 retirees met Finance Minister Nirmala Sitharaman to press for their long-standing demand of a minimum pension of Rs 7,500 per month plus dearness allowance (DA). The EPS-95 National Agitation Committee stated that the finance minister assured them that their demands would be considered with sympathy.

How is EPS contribution made?

For retirement savings, both employee and employer contribute to EPFO. Each contributes 12 per cent of the employee's basic salary plus dearness allowance (DA).

The employer's 12 per cent contribution is divided into two parts:

• 8.33 per cent is contributed to the Employees' Pension Scheme (EPS)
• 3.67 per cent is contributed to the Employees' Provident Fund (EPF)

However, EPS contribution is subject to a wage ceiling, which is generally capped at Rs 15,000 per month for most employees.

Read more: Mutual Fund Investment Plan: 100x return? 10 schemes that turned Rs 1 lakh investment into Rs 1 crore - LIST

Who is eligible for Employee Pension Scheme (EPS)?

• You must be a member of the EPFO and have contributed to EPS.
• You must have completed at least 10 years of eligible service to receive pension benefits.
• Normal pension is available at the age of 58 years.
• Early (reduced) pension can be taken from the age of 50 years, subject to certain conditions (with a reduced amount).

EPFO Minimum Pension

The minimum monthly pension under EPS is Rs 1,000 (as per current government rules). However, ahead of Budget 2025, a delegation of EPS-95 retirees met Finance Minister Nirmala Sitharaman to press for their long-standing demand of a minimum pension of Rs 7,500 per month plus dearness allowance (DA).

EPS calculation condition

• The formula for calculating the EPS pension is:
• Monthly pension formula = (Pensionable Salary x Pensionable Service) / 70.

Monthly Pension Calculation: Pensionable service, 12, 20, & 25 years

The monthly pension amount you will receive will depend on your pensionable salary and service. The average salary used in the formula is the average of your basic salary plus your DA for the last 12 months.

Pension Calculation

Contributions are subject to the current wage ceiling of Rs 15,000. Even if an employee's basic salary and dearness allowance are higher, the EPS pension is calculated on a maximum salary limit of Rs 15,000.

What will be your monthly pension after 12 years of service?

(Pensionable Salary X Pensionable Service)/70 = (15,000x12)/70 = Approximately Rs 2571.42.

What will be your monthly pension with 20 years of service?

(Pensionable Salary X Pensionable Service)/70 = (15,000x20)/70 = Approximately Rs 4,285.

What will be your monthly pension with 25 years of service?

(Pensionable Salary X Pensionable Service)/70 = (15,000x25)/70 = Rs 5,357.

Also read: Systematic Withdrawal Plan: Rs 1 lakh monthly income via mutual funds? Here's how you could generate this sum with Rs 5 lakh one-time investment

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)

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