Fin Min approves Rs.1,000 minimum Monthly Pension
& clears enhancing the wage ceiling to Rs.15,000 of under Employees
Pension Scheme 1995
run by EPFO
New Delhi: The Finance Ministry has approved a proposal for providing a minimum monthly pension of Rs 1,000 toworkers in the organised sector, a move which
would benefit 27 lakh pensioners immediately.
The ministry has also approved a proposal for raising the basic wage ceiling under the Employees Provident
FundScheme to Rs 15,000 from existing
Rs 6,500 per month.
At present, there are about 44 lakh pensioners. Of this 27 lakh, including
5 lakh widows, get less than Rs 1,000 a month.
"The Finance Ministry has approved the proposal for providing a minimum monthly pension of Rs 1,000 under the
Employees Pension Scheme 1995 (EPS-95) run by EPFO. The
ministry also cleared enhancing the wageceiling to 15,000 under social security schemes run by the retirement fund body,"
an official source said.
The government will provide additional subsidy of Rs 1,217 crore
to ensure the minimum monthly pension of Rs 1,000 starting 2014-15. Pensioners are, therefore, expected to get benefit with effect from April 1 this year.
Labour Minister Oscar Fernandes, however, is yet to decide on
whether the move requires the Cabinet approval or not.
The Labour Ministry's proposal on giving a minimum monthly pension of Rs 1,000 under the EPS-95,
run by the Employees' Provident Fund Organisation (EPFO), has been pending for
a long time.
Earlier, the Labour Ministry had proposed that government should
increase subsidy on EPS-95 from 1.16 percent of basic wage to 1.79 percent to
ensure minimum pension. However, it did not find favour with the Finance
Ministry as this would have resulted in a permanent increase in subsidy.
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.
The increase in the wage ceiling to Rs 15,000 would be effective only
after the notification of the decision by the government.
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.
All those employees getting basic wages, including basic pay and
dearness allowance, of more than Rs 6,500 per month, are not covered under the
social security schemes run by EPFO.
EPFO has a corpus of around Rs 5 lakh crore, including around Rs
1.7 lakh crore in its pension fund. It has asubscriber base of around 5 crore and all of them
are covered under the EPS-95.
The increase in wage ceiling under the scheme run by EPFO is important as it would
bring in around 50 lakh moreworkers and
increase the flow of mandatory savings.
PTI
Source: http://zeenews.india.com
January 25, 2014
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