Retirement fund body EPFO on Wednesday deferred a decision on raising the minimum monthly pension to Rs 1,000 for its subscribers and decided to take up the issue at its next meeting.
“We have decided to form a committee to suggest modalities for implementing the proposal to raise the minimum pension to Rs 1,000 per month. The committee will give its report within a month,” Labour Minister Mallikarjun Kharge told reporters after a meeting of the Central Board of Trustees (CBT), the highest decision making body of the EPFO.
The issue of raising the minimum pension, sources said, would be taken up at the next meeting of the CBT sometime in April.
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The proposal to raise the minimum pension for all subscribers to Rs 1,000 will envisage an additional annual outgo of Rs 600 crore, they said, adding no decision could be taken on sharing of the burden.
According to the data of the Employees’ Provident Fund Organisation (EPFO), out of the 35 lakh pensioners as on March 31, 2010, as many as 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. There are cases where pensioners are getting a monthly pension as low as Rs 12 and Rs 38.
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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 have to 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.