Senior Hr Executive
Hr , Ir , Complainces
Senior Manager/freelance Consultant
Retirement fund body EPFO's trustees on February 5 will decide on amending its scheme to provide a minimum monthly pension of Rs 1,000, which will immediately benefit its 27 lakh pensioners.
The Central Board of Trustees (CBT), the apex decision making body of EPFO, will also decide on amending EPF scheme 1952 to raise the monthly wage ceiling to Rs 15,000 to cover more workers under its various social security programmes like provident fund, pension and employee deposit-linked insurance.
At present, workers getting basic wages, including basic pay and DA, of up to Rs 6,500 are covered under the ambit Employees' Provident Fund Organisation (EPFO).
"The Finance Ministry has approved the Labour Ministry's proposal to provide a minimum pension of Rs 1,000 per month and enhance the wage ceiling to Rs 15,000. Now, the trustees would meet on February 5 to approve the amendment in schemes run by EPFO to operationalise the two decisions," an official source said.
The Central Board of Trustees (CBT), the apex decision making body of EPFO, had earlier approved the proposal, following which the Labour Ministry pursued it with the Finance Ministry.
According to sources, after the nod given by the CBT, headed by the Labour Minister Oscar Fernandes, the two proposals would be put before the Union Cabinet for approval as the government would have to make provision of funds for the purpose.
The source further said that Finance Minister P Chidambaram may also make announcement on entitlement of minimum monthly pension of Rs 1,000 in his interim budget next month.
The entitlement of minimum monthly pension of Rs 1,000 to workers in the organised sector under the Employees' Pension Scheme 1995 (EPS-95), would benefit 27 lakh pensioners immediately.
At present, there are about 44 lakh pensioners. Of this 27 lakh, including 500,000 widows, get less than Rs 1,000 a month.
The other proposal for raising basic wage ceiling under the Employees Provident Fund Scheme to Rs 15,000 from existing Rs 6,500 per month is expected to bring in 50 lakh more workers under the ambit of schemes run by the EPFO.
The government would have to provide an additional amount of Rs 1,217 crore (Rs 12.17 billion) to ensure the minimum pension of Rs 1,000 starting 2014-15. Pensioners are, therefore, expected to get benefit with effect from April 1 this year.
The Labour Ministry in its revised proposal has asked the Finance Ministry to provide for around Rs 1,217 crore additional amount every year, and indicated that this amount can come down over a period of time with more members subscribing to EPS-95.
At present, government contributes 1.16 per cent of basic wage of workers as contribution toward the EPS-95. Government had provided around Rs 1,400 crore for the purpose in 2012-13.
The decision of enhancing the wage ceiling would also have some financial implication as government's contribution towards EPS-95 would increase towards EPS-95 as 50 lakh more wokers would join the schemes run by EPFO.
The news has been circulated in various national dailies and let this proposal get approval from Ministry of finance and the gazatte should be published for enforcement. Afterward only the rule become a law.
Thanks & Regards,
Sumit Kumar Saxena
This proposal was pending for a long time. Even now I don't think this Govt will be able to push it through before the election. Meanwhile the value of Rs1000 has eroded to an extent that this amount now looks like peanut,and probably by the time this is actually implemented this may not be even sufficient to buy your milk for a month.
I have a few doubts, if any one has answers please elucidate.
1: Currently pension is paid to widow & children of less than 25 years, in case of death of member while in employment. All are pensioners,will all of them get Rs 1000 minimum.
2. It appears it is only the minimum pension which is increased, which means one who gets even a rupee more than 1000 will continue to get that same amount only, or is there a proposal to increase pension across the board.
3. Any one who gets updates on this please keep posting on this forum.
4. Hope this gets implemented immediately before it gets entangled in political upmanship & before the elections are announced,so that it does not get held up again in model conduct issues.