The government has paid Rs. 2,000 crore to the Employees Pension Scheme (EPS), to enable it to pay a minimum Pension of Rs. 1,000 to all those covered by the Scheme. About 50% of the existing pensioners under EPS were getting below Rs. 500 only as monthly pension.After the continuous demand of the Central Trade Unions, it was assured last year that at least a minimum pension of Rs.1,000 will be paid to all covered under the EPS. It is towards this that the amount has been released by the government.
The strong protest from the Central Trade Unions has compelled the government to take immediate action for the restoration of Rs. 1,000 as Minimum Pension to those in the EPS Scheme. Many of these EPS subscribers were getting much less than Rs.1,000 as pension. After sustained efforts of the trade unions, the government increased the minimum pension to Rs. 1,000 but for one year only, which is over by March 2015. The protest from the CTUs has some result. A cabinet note is being prepared for issue of orders for Rs. 1,000 as Minimum Pension in perpetuity. The orders should be issued before 30th April so that the existing pension is not reduced.
New Delhi, Apr 10 The Centre of Indian Trade Unions (CITU) today registered a protest against Employees Provident Fund Organisation’s (EPFO) move to suspend the minimum pension of Rs 1000 and asked the NDA government to continue with the scheme proposed during the previous dispensation.
The UPA government had taken the decision to increase the minimum pension to Rs 1,000 for pensioners and widow pensioners under the Employees Pension Scheme 1995.
But, the retirement fund body’s has decided to suspended the minimum monthly pension scheme from this month, which will hit about 32 lakh pensioners.
“EPFO has issued circulars putting on hold the minimum pension. The CITU registers its strongest protest against this action of EPFO and Government of India,” CITU President A K Padmanabhan said in a statement.
Padmanabhan said the NDA government had in September 2014 decided to go ahead with implementation of the UPA dispensation’s scheme, but only uptil March 2015. The scheme sought to hike the pension amount to a flat Rs 1,000 per month for those who were getting lower amount earlier.
“Trade unions had at that time itself objected to this, pointing out that this limited order will be used against workers by stopping it at the will of the government. But, Government had assured it will not be stopped.
“The circular issued now by EPFO has raised serious concern among workers and pensioners on the intentions of the government, as it comes in the background of various retrograde changes proposed in EPF Schemes by it,” Padmanabhan alleged.
He asked the Centre to immediately issue orders for continuing with the minimum pension scheme.
The CITU also urged trade unions, workers and pensioners organisations to raise their voice of protest against this “unwanted” delay in the issuance of orders for continuation of the minimum pension.
The meeting of the Cabinet held today, 28 February, has approved the proposal of the EPFO to fix the Minimum Pension as Rs. 1,000. This will benefit 28 lakh pensioners, who are at present getting less than Rs. 1,000 as pension. In certain cases, the pension is as low as Rs.10.These pensioners are part of the Employees Pension Scheme whose total number will be about 44 lakhs.
It is reported that the government will have to provide an additional grant of Rs. 1,217 crores to EPFO for implementation of the new decision.
It is reported that the government has decided to increase the minimum pension to Rs.1,000 for the pensioners under Employees Pension Scheme.This was a demand of the Central Trade Unions. At present many are getting pension less than Rs.500; even some are getting Rs.10 or Rs.20 per month.
It is also reported that the government had decided to increase the eligibility wage ceiling under EPF scheme from Rs. 6,500 to Rs. 15,000/-
We welcome the above decisions which have been the longstanding demands of the trade unions on which many struggles have been organised by the CTUs.
New Pension System worse than EPS
Union Finance Secretary wrote to the Union Labour Secretary suggesting to encourage subscribers of Employees Pension Scheme (EPS) to shift to the New Pension Scheme (NPS) claiming NPS as a better substitute to EPS, NPS being ‘self-sustaining’ with ‘decent returns’ and ‘adequate pension wealth’ and “The government would be free from any open ended and financially unsustainable liability of EPS.
The Employees’ Provident Fund Organisation (EPFO) disagreed with the Finance Ministry’s proposal stating that return under EPS for May 2009 – May 2013 period would be 10.47% which is higher than the return under NPS; and EPS providing social security for lower income group in old age; pension to widows, children and dependents in case of death of the subscriber; many interim benefits; with provision of withdrawing self contribution in EPF. There is 15 years lock-in period in NPS. EPS subscribers get bonus of two years on completion of 20 years of service and there is provision of commutation or part withdrawal which are not available in NPS. EPS’ corpus stood at Rs 1.83 lakh crore wih 5 crore subscribers as against NPS corpus of Rs 29,852 crore with little over 47.70 lakh subscribers as on March 31, 2013. EPFO manages PF corpus of Rs 3.7 lakh crores plus Rs 1.83 lakh crore pension fund. (From: the Hindu, 6 August 2013/ Working Class)
New Delhi, Aug 11 Trade unions have decided to oppose finance ministry’s proposal to offer the New Pension System (NPS) to the retirement fund body EPFO’s subscribers who are covered under Employees’ Pension Scheme-1995 (EPS-95).
The Finance Ministry has said the NPS scheme provides better returns than EPS-95 run by the Employee’s Provident Fund Organisation (EPFO) at present.
“Whenever this proposal will be taken up in the trustees’ meet, we will oppose it,” Hind Mazdoor Sabah Secretary and member of the EPFO’s apex decision making body, Central Board of Trustees, A D Nagpal told PTI.
Another Trustee and President of Indian National Trade Union Congress G S Reddy said, “We want to continue with the EPS-95 scheme. We don’t want to give any such option to subscribers.”
Another trustee and All India Secretary of Bhartiya Mazdoor Sangh ,Virjesh Upadhyay, also opposed it and said,”This has not come to us for discussion. But we will certainly oppose this.”
Earlier, disagreeing with the proposal, EPFO has already written a letter to the Labour Secretary explaining its position.
Financial Services Secretary has put up the proposal for NPS before the Labour Secretary.
“If we take the return of EPS as indicative return on the fund managed under EPS, then the annualised return for the period May 2009 to May 2013 will be 10.47 per cent, which on the face of it is higher than the return declared by NPS in its scheme for central government”, EPFO has said
Finance Ministry has written to the Labour Ministry saying: “The subscribers (of EPS) may be given an option to either remain with EPS or join NPS with the same contribution.”
The finance ministry has argued that NPS, which is self sustaining pension system, could be a good substitute for EPS and would be beneficial for subscribers as they would get decent returns and adequate pension wealth.
Moreover, the Finance Ministry said, “The government would be free from any open ended and financially unsustainable liability of EPS…”
Disagreeing with the contention, EPFO has said that EPS-95 provides social security for lower income group people in their old age. In addition, it also provides pension to widow, children and dependents in case of death of the subscriber.
Under the EPS scheme, many interim benefits are provided.
Subscribers can withdraw their contribution towards pension while withdrawing his or her EPF money. There is a lock in period of 15 years in NPS.
EPS’s corpus size stood at Rs 1.83 lakh crore as on March 31, 2013. Under the NPS, total corpus was at Rs 29,852 crore as on March 31, 2013 with a subscribers’ base of 47,70,507 members.
Currently central government employees are covered under the NPS while it is also available for individuals opting for it.