Employees demand that Aavin should opt out of EPF and create a separate provident fund
K. Govindaswamy is 61 years old. Having retired from Aavin in February 2010, he now draws a pension of Rs.1,566 — a sum that is hardly enough to survive.
“I work in a milk depot for Rs.4, 600 a month and also put in some time at a private fertilizer shop to meet the expenses of running my household,” he said.
His last drawn pay was Rs.16,600 and though he put in 30 years as a permanent employee and 5 years as part-time sales assistant, he only got around Rs. 5 lakh as gratuity, EPF settlement and superannuation fund when he retired. “I met the expenses of the marriage of two of my daughters with that amount. Two more daughters are yet to get married. I am worried about how to manage it,” he said.
Mr. Govindaswamy is not alone; hundreds of retired employees of Tamil Nadu Cooperative Milk Producers Federation too suffer. This is because their pension during their service was linked to the Employees’ Provident Fund wherein the employer’s contribution was restricted to Rs. 780 a month. This was based on a cap of Rs. 6,500 on the emoluments (basic pay and dearness allowance). The employees could not also increase their contribution in proportion to their emoluments.
For instance a deputy manager, who put in around 40 years of service and whose last drawn pay was around Rs. 40,000, gets a pension of just Rs. 2,000. “If Aavin had opted out of the EPF and created their own pension fund, employees such as me would have gotten at least Rs. 12,000 as pension and Rs. 25 lakh as gratuity, EPF settlement and superannuation fund,” said a former employee, who did not want to be named.
“Even the old age pension that the government gives to senior citizens comes up to Rs.1,000. But in Aavin there are persons who have retired with pensions of just Rs. 300. Many former employees are forced to work as security guards, office assistants or work in milk depots as agents,” said an employee.
Meanwhile, the Tamil Nadu Aavin Engineers Association urged the government to increase the pension amount. “Former employees too should be covered under this. The ceiling on emoluments can be removed or a separate provident fund created as in the case of CMWSSB, TNSCB and TNPCB,” said K. Gopinath, State president, Tamil Nadu Aavin Engineers Association.
Aavin officials said that a committee had been set up to look into the issue of pension. “They have been studying various possibilities and listening to representations of employees associations and unions,” he said.