Amid fund crunch, EPFO shelves plan to double minimum pension

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Govt has guaranteed a least benefits of Rs 3,000 per month for informal sector workers through PMSYM scheme.

EPFO does not have sufficient fund to double the pension on its own and needs financial support to implement the scheme.

New Delhi: The plan to double the minimum pension for pensioners of the Employees’ Provident Fund Association (EPFO) has been shelves.

An inside board of the retirement fund manager had prescribed expanding the pension for EPFO endorsers from the existing Rs 1,000 per month to Rs 2,000 per month. Although, the labour ministry has postponed the plan, EPFO officals said.

“This is now on hold. We cannot go ahead as it will burden us financially," said one of the officials mentioned above.

The Union Labour and Employment Ministry, said there are two constraints—one financial and other the timing of the year. As it’s election time, it’s not conceivable to request more funding, another official said.

EPFO does not have sufficient fund to double the pension on its own and needs financial support to implement the scheme which will advantage pensioners getting less than Rs 1,000. After reporting an 8.65 per cent interest rate for its 60 million endorsers in February for 2018-19, the excess with the retirement fund body will be around Rs 150 crore.

“The model code of conduct came in March, but the EPFO had sought clarity from the government in January. There was no assurance from the government, whether or not they will provide the money," said the first official.

“As the cabinet note was prepared for action based on the recommendations, the report was not made public," he added.

The Pradhan Mantri Shram Yogi Maandhan (PMSYM) scheme provides for a minimum monthly assured pension of Rs 3,000 for unorganised sector workers from the age of 60 years. The scheme came into effect from February 15, 2019.

Any informal sector worker of the age of 18 year to 40 year can enrol for this pension scheme. The monthly insurance premium ranges from Rs 55 at the age of 18 years to Rs 200 at the age of 40 years. The central government is making equal contributions for these workers under the scheme.

In the last board meeting of the EPFO it was demonstrated that a new meeting will be called to announce the pension hike.

A labour ministry spokesperson person denied to comment on the development.

(With agencies Input)