Minimum
pension of Rs. 1,000/- per month in perpetuity to Pensioners of Employees’
Pension Scheme, 1995
29th April, 2015
The
Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its
approval for continuation of the minimum pension of Rs. 1,000/- per month to
the pensioners of Employees’ Pension Scheme, 1995 (EPS) beyond the financial
year 2014-15 on perpetual basis. Currently, it is effective only upto
March, 2015. The Cabinet also approved corresponding grant of continuous
annual budgetary support for implementing the minimum pension which will be to
the tune of Rs. 850 crore per year on a tapering basis.
Providing
a minimum pension of Rs. 1000/- per month is an effort to provide meaningful
subsistence to pensioners who have served in the organized sector. The
present proposal is likely to benefit approximately 20 lakh pensioners under
EPS, 1995.
Background:
A large number of member pensioners under the EPS, 1995 receive low pensions
which is not commensurate with the growing cost of living. The primary
reason behind a meager pension is that it is calculated on the basis of
pensionable service and average of last sixty months’ wages. If either of
them is low, the pension amount will also be low. This is largely seen in
cases of employees of seasonal industries. Further, pensioners who were
earlier members of the erstwhile Family Pension Scheme, 1971 have been given
past service benefits for determining pension as per Para 12 of the Employees’
Pension Scheme. This has resulted in fixation of low pension for these
pensioners.
The Union Cabinet has in its meeting in February, 2014 accorded approval to the
proposal for ensuring a minimum pension of Rs. 1,000/- per month for the
pensioners of EPS for the financial year 2014-15 by way of providing budgetary
support of Rs. 1217.03 crore. Based on the approval of the Union Cabinet, the
Employees’ Pension Scheme, 1995 (EPS) was amended on 19.08.2014 to incorporate
the provision for providing a minimum pension of Rs. 1,000/- per month for the
financial year 2014-15.
After
the issue of the Gazette Notification dated 19.08.2014 (with effect from
01-09-2014), the Employees’ Provident Fund Organisation (EPFO) has commenced
disbursing the revised pension from the month of September, 2014. The
number of pensioners who have been benefited by the minimum pension provision,
which has been compiled from the actual disbursement of pension made by the
offices of EPFO after the implementation of the notification, is according to the
table below:
|
Month
|
Number of Pensioners affected
|
Amount as per original pension
(Rs. Crore)
|
Amount paid after Minimum Pension
Notification (Rs. Crore)
|
GOI support
|
|
September 2014
|
19,19,756
|
104.17
|
165.98
|
61.81
|
|
October 2014
|
19,32,515
|
104.14
|
166.99
|
62.84
|
|
November 2014
|
19,42,476
|
104.69
|
168.18
|
63.49
|
|
December 2014
|
19,47,750
|
106.73
|
170.68
|
63.95
|
|
January 2015
|
15,13,827
|
94.72
|
148.75
|
54.03
|
|
February 2015
|
16,80,533
|
103.00
|
160.15
|
57.15
|
|
March 2015
|
17,65,307
|
99.25
|
158.39
|
59.13
|
- See more at:
http://taxguru.in/company-law/govt-approves-minimum-pension-rs-1000-month.html#sthash.J9kGHA9N.dpuf
