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LATEST NEWS UPDATES | Govt wants EPFO pension raised to Rs 1,000 a month

Govt wants EPFO pension raised to Rs 1,000 a month

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published Published on Aug 21, 2012   modified Modified on Aug 21, 2012
-The Times of India

 The labour ministry has written to the finance ministry recommending that the minimum monthly pension for members of the Employees Provident Fund Organization (EPFO) be raised to Rs 1,000 per month. Who will fund the additional Rs 539 crore per year that this will cost, the government or workers, however remains a fraught issue.

The EPFO currently has 35 lakh pensioners as its subscribers, of whom 7 lakh get Rs 1,000 or more as pension per month, 14 lakh get less than Rs 500 and some get as low as Rs 38 and Rs 12 per month.

Following several meetings of the Central Board of Trustees of the EPFO, the labour ministry has written to the finance ministry suggesting two options to fund the increase in the minimum pension; one, that the two-year bonus given to every employee who completes 20 years of work be withdrawn, or two, that the government foot the bill for the entire increase.

Both ministries favour the first option, sources close to the developments said. The labour ministry says withdrawal of the bonus would not only raise the minimum pension to Rs 1,000 but would also allow for a further 5% increase.

However, central trade unions will oppose this move. "You are essentially taking away what is the earned right of the employee," said D L Sachdev, EPFO trustee and national secretary of the All India Trade Union Congress.

"The government will take money from the workers to give it back to workers," said A D Nagpal, secretary of the Hind Mazdoor Sabha. The unions want the government's contribution to be raised from 1.16% to 1.79% instead.

The labour ministry has also proposed two amendments to the Provident Fund Act in order to increase membership. It has proposed lowering the coverage limit on enterprises having a minimum of 20 employees to one having a minimum of 10 employees, which it says will increase membership by 50 lakh. It has also proposed that the maximum salary limit, which currently stands at Rs 6,500 be raised to Rs 15,000 in two steps, since even the minimum wage in cities like Delhi is now over Rs 6,500.

The Times of India, 21 August, 2012, http://timesofindia.indiatimes.com/india/Govt-wants-EPFO-pension-raised-to-Rs-1000-a-month/articleshow/15578856.cms


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