The Union Finance Ministry rejected the proposal to increase the minimum pension of Employees Provident Fund from the current Rs 1000 to Rs 2000. This proposal was sent by the Labor Ministry to the Union Finance Ministry. Information about the rejection of this proposal was given in the recent meeting of the Central Board of Trustees (CBT), the apex decision-making body of the Employees Provident Fund Organization (EPFO), held on Saturday.
The Union Finance Ministry rejected the proposal to increase the minimum pension of Employees Provident Fund from the current Rs 1000 to Rs 2000. This proposal was sent by the Labor Ministry to the Union Finance Ministry. Information about the rejection of this proposal was given in the recent meeting of the Central Board of Trustees (CBT), the apex decision-making body of the Employees Provident Fund Organization (EPFO), held on Saturday.
A source having knowledge of this matter said, ‘The high powered committee of the government had sent a proposal to the Finance Ministry to increase the minimum pension under EPS from Rs 1000 to Rs 2000. The government had constituted this high powered committee. This high powered committee had sent a proposal for additional budgetary proposal to increase the minimum pension. But the Finance Ministry did not agree to this proposal.
According to the annual report of the Social Security Organization for FY 23, there are 75.5 lakh pensioners under this pension scheme. Of these, 36.4 lakh pensioners receive a monthly pension of up to Rs 1000. In this sequence, 11.7 lakh pensioners get monthly pension ranging from Rs 1,001 to Rs 1,500. However, 8,68,000 pensioners get a pension ranging from Rs 1,501 to Rs 2,000. In this sequence, only 26,769 pensioners get a pension of more than Rs 5,000.
A member of the Central Trustee Board, on the condition of anonymity, said, ‘In this meeting, our demand was to increase the minimum pension. The pension fund is valued annually and additional concessions are provided if the fund allows. In most of the evaluations conducted since 2000, the Fund was in loss and hence no additional concessions were provided. The central government did not provide budgetary support in 2014 and this did not increase the minimum pension by more than Rs 1000. The demand for increasing the minimum pension is being raised on
a large scale. Therefore, the minimum pension should be increased in future.
EPS, 1995 is a self financing scheme. In this, 8.33 percent of the employee’s monthly income is provided in the Employees Provident Fund Fund and apart from this, the Central Government provides 1.66 percent of the monthly salary (only on basic salary less than Rs 15,000). Parliament’s Standing Committee on Labor had told the Labor Ministry in March 2022 that the monthly pension of Rs 1,000 was ‘grossly inadequate’. The committee had asked the Labor Ministry to take up the matter with the Finance Ministry and get adequate budgetary support.
In the 235th meeting of the Central Trustee Board held on Saturday, it was recommended to pay 8.25 percent interest for the financial year 2023-24, which is the highest in three years.
The board recommended distributing Rs 1.07 lakh crore to EPFO members in 2023-24, taking the total amount to about Rs 13 lakh crore.
It is estimated that after this payment, EPFO will have a surplus of Rs 278 crore in FY23.
