EPFO may fix minimum pension at Rs 1,000 per month
Retirement fund body EPFO may take a final decision on fixing the minimum pension for its subscribers at Rs 1,000 per month, during a meeting of the Central Board of Trustees (CBT) scheduled on February 22.
"The EPFO's apex decision making body the CBT could fix minimum pension at Rs 1,000 per month for its subscribers, at a meeting this month," All India Trade India Congress secretary D. L. Sachdev told agencies.
Sachdev, who is also an Employees' Provident Fund Organisation (EPFO) trustee informed the proposal is listed on the agenda for the CBT meet on February 22.
The trustee said that CBT will also discuss the proposal to issue contribution cards similar to bank passbooks to its over 4.72 crore subscribers, which would be updated on monthly basis from April 1.
According to EPFO data, as of March 31, 2010, there were 35 lakh pensioners subscribed to the retirement fund body, of which 14 lakh persons get a monthly pension of less than Rs 500
The number of EPFO pensioners getting a monthly pension of Rs 1,000 is 7 lakh. The data reveals there are cases where pensioners are getting a monthly pension as low as Rs 12 and Rs 38.
As per estimates, the proposal to hike the minimum pension to Rs 1,000 per month will require an additional contribution of 0.63 per cent of subscribers' basic pay and dearness allowance to the pension account.
The hike in contribution will be over-and-above the 8.33 per cent contributed by employers toward the pension account of employees, as well as the 1.16 per cent provided by the government under the scheme.
It is likely that trustees may decide on sharing of additional burden equally by government, employees and employers, a trustee said.
The other important move of the retirement fund body would be to start issuing contribution cards similar to bank passbook from April this year.
At present, it is mandatory for the employers to prepare 'Contribution Cards' and update it every month as per the provisions of the Employees' Provident Fund Scheme 1952, though such cards are not provided to subscribers.
EPFO has proposed to the CBT that this be implemented from April 1, 2012. The card will also have additional information like date of birth, nomination and family details.
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