A Bengaluru-based body of pensioners under the Employees’ Pension Scheme (EPS)-1995 of the Employees’ Provident Fund Organisation (EPFO) has renewed its call for calculating the value of pension wealth under the Scheme on the lines of the National Pension System (NPS) and fixing 8% rate of interest to the Pension Scheme.
In a response to an item appeared in FAQ columns on EPFO pensioners on Sunday (September 15), the ITI Retired Officers Association (IRIROA) stated that even though the EPS was similar to the NPS in terms of being a contributory scheme, the pension amount was being calculated based on “fixed pensionable salary,” and not on the basis of accumulated pension fund that was being followed in respect of the NPS.
Giving illustrations, the body pointed out that as per the present EPS-95 Scheme, the maximum pension a retiree would, under normal circumstances, get for 35 years of service was ₹7,500/- per month or ₹90,000 per annum. This worked out to 3.06% return on the member’s accumulated pension fund. Similarly, for 25 and 30 years, the monthly pension amounts would be ₹5,357 (5.14%) and ₹6,428 (3.98%) respectively.
Advocating the determination of 8% rate of return (RoR) on accumulated pension, the pensioners’ body argued that the existing rate of return, expressed as a percentage of pension payable, was “very much lower” than that of banks. If 8% RoR was taken, the monthly pension would have been ₹8,329, ₹12,907 and ₹19,633 for 25, 30 and 35 years of service respectively.
The ITIROA, which made certain suggestions in a representation sent a couple of months ago to the Prime Minister and Union Ministers for Finance and Labour and Employment, also wanted the facility of commutation to be provided to the pension wealth in the event of any exigency for the pensioner.
Published - September 16, 2024 08:45 pm IST
