New Delhi: The Centre was asked in parliament about why the minimum pension under the EPS has not been increased to Rs 7,500 from Rs 1,000. The government also questioned the delay in implementing the Supreme Court’s order to fix pensions.
EPS-95 pensioners have been demanding a minimum monthly pension of Rs 7,500. Currently, the minimum EPS-95 pension is Rs 1,000 per month.
On December 15, MP Rajesh Ranjan asked the Labour Ministry in the Lok Sabha to clarify why there has been a delay in raising the pension and in implementing pension fixing as directed by the Supreme Court. In a written reply, the Ministry of Labour and Employment explained the reasons why the EPS-95 pension claim has not yet been accepted.
Pension is contribution–defined benefit
The Labour Ministry explained that EPS-95 is a defined contribution–defined benefit social security scheme. “The corpus of the Employees’ Pension Fund is made up of (i) contribution by the employer at the rate of 8.33 percent of wages and (ii) contribution from Central Government through budgetary support at the rate of 1.16 percent of wages up to an amount of Rs 15,000 per month. All benefits under the scheme are paid out of such accumulations,” the ministry said.
Actuarial deficit
“The fund is valued annually as mandated under paragraph 32 of EPS, 1995 and as per the valuation of the fund as on 31.03.2019 there is an actuarial deficit,” it added. The ministry stated that this shortfall is a major reason why a sharp rise in the minimum pension or linking EPS pension with the cost-of-living index is difficult.
The ministry referred to the recommendations of a High-Empowered Monitoring Committee which investigated the possibility of introducing a dearness allowance under EPS-95. The committee concluded that given the actuarial position of the fund, linking EPS pension with the cost-of-living index or providing DA was not viable.
Additional budgetary support given
The government further stated that it already provides additional budgetary support to ensure the Rs 1,000 minimum pension in addition to the regular annual 1.16 percent contribution.
Supreme Court directions
Regarding the implementation of Supreme Court orders relating to pension fixation based on increased salaries, the government said the EPFO has taken steps to implement the Supreme Court’s judgment in a timely way.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: ZEE News
