A high-level labour committee has suggested doubling the pension to Rs 2,000 per month under the Employees’ Pension Scheme, which is being ‘actively’ considered by the finance ministry
New Delhi: The finance ministry is actively considering doubling the minimum pension under the Employees’ Pension Scheme, which is managed by the Employees’ Provident Fund Organisation (EPFO), to Rs 2,000 per month, says an Economic Times report. The move, if implemented, could benefit more than 40 lakh workers.
A high-level labour committee has given the green signal to increase the pension, which is being “actively” considered by the finance ministry, the publication reported citing two of the committee members aware of the development.
At present, the Centre spends about Rs 9,000 crore per annum on pensions under the Employee Pension Scheme to support the pensioners. And, if such a proposal goes through the amount will move up to Rs 12,000 crore.
“It is very clear that with the existing kitty, it will not be possible to bear the additional burden on account of higher pension,” one of the persons quoted above told ET. “Hence, the ball is in the court of the finance ministry to decide if the government is willing to bear the cost.”
According to the report, the government is likely to add a provision restricting beneficiaries from withdrawing the pension part of their provident fund till the age of retirement if they want to avail the higher pension.
Currently, there are approximately 60 lakh pensioners, of which about 40 lakh are receiving less than Rs 1,500 per month. Of these, 18 lakhs are the existing beneficiaries under the minimum pension of Rs 1,000. The finance ministry has about Rs 3 lakh crore of pension funds.
In 2014, the government had given its nod for a monthly minimum pension of Rs 1,000 for a year under the EPS, following which it extended the amount in perpetuity the following year. As of now EPF contribution is compulsory for employees earning a monthly salary up to Rs 15,000 in companies and establishments with 20 or more workers on its roll.
