The government has made a key announcement on the pension amount of Rs. 7,500 per month. Find out the full details.
Pension: Many people are eagerly waiting for the government to increase pension. Most importantly, they thought that a key decision would be taken on EPS pension. But now the government has made a key announcement on pension increase. What decision has the government taken so far? What announcement has it made? Let us now find out.
Employees Pension Scheme (EPS) subscribers have been demanding for a long time that the minimum and maximum EPS pension limit be increased from the current Rs. 1,000 to Rs. 7,500. However, it seems that their demands are unlikely to be fulfilled in the near future. This was revealed in a reply given by Union Minister of State for Labour and Employment Shobha Karandlaje in the Lok Sabha on Monday.
Shobha Karandlaje said that as per the value of the EPS fund as on March 31, 2019, there is an actuarial deficit. This means that the pension fund set up to pay the existing pension subscribers is not generating sufficient revenue. The minister indirectly suggested that it is not possible to increase the pension amount due to the deficit in the fund.
This was in response to an unstarted question asked by Lok Sabha member Balya’s uncle Suresh Gopinath Mhatre. Mhatre asked whether the government is considering increasing the minimum pension under EPS-95 from ₹ 1,000 to ₹ 7,500 per month. Responding to this, Shobha explained that EPS-95 is a “defined contribution-defined benefit” social security scheme.
When it comes to the Employees Pension Fund, the company contributes 8.33 percent of the employee’s salary. Karandlaje said that the central government will also contribute 1.16 percent through budgetary support. All benefits under this scheme will be paid from such funds. The fund is calculated annually as per paragraph 32 of the EPS 1995. The minister said that there is an actuarial deficit as per the value of the fund as on March 31, 2019.
Apart from the issue of minimum pension, Mhatre also raised several other important issues related to EPS 95 pension. Why is DA (Drought Allowance) not being given to pensioners under EPS-95 despite the continuous increase in inflation, and when the current pension amount under EPS-95 scheme is not enough to live on, is the government taking any steps to make it livable, Mhatre asked. Has the government acknowledged the demands made by EPS-95 pensioners; if so, what action has been taken so far?
In response, Karandlaje said that the government is providing a minimum pension of ₹ 1,000 per month to pensioners under EPS, 1995. This is in addition to the 1.16 per cent wage budget support provided annually to the Employees Provident Fund Organisation (EPFO), the minister said. This means that the government will have to provide additional funds to meet current liabilities as EPS is not generating sufficient revenue. Minister Karandlaje said that the Government of India is committed to ensuring that workers get maximum benefits under the EPS-95 scheme, keeping in mind the health of the fund and future liabilities.
What is EPS-95? EPS provides social security to members and their families in old age. The Minister’s reply indicates that the minimum pension amount is unlikely to increase in the near future as the scheme is facing challenges in meeting its current liabilities.
EPS members can get pension after retirement at the age of 58. Early membership pension can also be availed from the age of 50. Disability pension is available on permanent total disability while in service. Widow pension is available in case of death of a member or pensioner. Pension is available for 2 children up to the age of 25 after the death of the member. Orphan pension is also available for 2 orphans up to the age of 25 if there is no spouse at the time of death of the member or if the spouse dies. There are also benefits like nominee pension, pension for dependent parents, withdrawal benefit.
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