No plans to re-open higher pension window: EPFO CEO Ramesh Krishnamurthi

Ramesh Krishnamurthi, the Chief Executive Officer of India's Employees' Provident Fund Organisation (EPFO), has categorically stated that there are no plans to reopen the window for higher pensions under the Employee Pension Scheme (EPS). This came amid concerns raised by trade unions over potential changes to the social security framework following the introduction of the Social Security Code and revised EPFO schemes. Krishnamurthi emphasized that the reforms focus on continuity rather than contraction of benefits, reassuring stakeholders that key elements of the existing EPS 1952 remain intact. Krishnamurthi addressed the issue during a press interaction, clarifying that the core provisions of the EPS Scheme 1952, established nearly seven decades ago, have not undergone any modifications. Contributions continue to be made at the rate of 12%, and the wage ceiling remains unchanged at ₹15,000, as notified in 2014. He noted that the concept of voluntary provident fund (PF) contributions had long existed, with many employers offering PF benefits equivalent to 12% of employees' wages regardless of salary levels. According to him, there have been no fundamental changes to these practices. The CEO also highlighted that the Social Security Code introduces a unified definition of wage, expanding social security coverage to include unorganized workers, gig economy participants, and platform workers. While acknowledging that the code grants the government flexibility to adjust the wage ceiling, Krishnamurthi stressed that such decisions would depend on budgetary considerations and remain within the purview of policymakers. When questioned about the possibility of reopening the window for higher pensions, a feature previously available but later closed, Krishnamurthi firmly denied any such intentions. He explained that the EPS operates as a pooled fund, drawing contributions from all members. Processing nearly 4.4 lakh demand letters, the EPFO has already fulfilled most requests for enhanced pensions. However, each such payment costs the pension fund approximately ₹25 lakh, drawn directly from the existing corpus. Krishnamurthi warned against treating the fund as an infinite resource, emphasizing that it is not supported by government funding but solely by the contributions of current members. He cautioned that draining the corpus to meet the demands of a few could jeopardize future retirees who rely on the same pool. “If we drain that corpus to fulfill the pension for a few people now, what happens when the time comes when the current members retire?” he asked, stressing that the scheme must avoid becoming a Ponzi-like structure. According to Krishnamurthi, the EPS is specifically designed to serve the poorer segments of the formal workforce. He rejected the notion that the fund contains surplus resources, stating that increasing pensions for a select group would inevitably reduce the available corpus for others. “I can't rob Peter to pay Paul,” he said, underscoring the need for equitable distribution of resources among all retirees. The EPFO chief reiterated that there is currently no consideration for extending the window for higher pensions, citing both financial constraints and the necessity of maintaining a sustainable system for all beneficiaries. His remarks aim to dispel misconceptions about the availability of additional funds and reinforce the importance of preserving the existing structure for the broader population. Krishnamurthi concluded by reaffirming his commitment to ensuring that the EPS continues to function effectively while adhering to principles of fairness and sustainability. He urged stakeholders to understand the limitations of the current financial model and to recognize the long-term implications of any changes to the pension scheme.