Hike in minimum monthly pension under EPS-95 scheme not possible without budgetary support
Labour Minister Santosh Gangwar said the government has constituted a high empowered monitoring committee for complete evaluation and review of the EPS, 1995
New Delhi: Increase in minimum pension payout under Employees’ Pension Scheme, 1995 (EPS-95) is not possible without compromising the financial viability of the scheme or additional budgetary support, the government said on March 22.
Labour Minister Santosh Gangwar in a written reply in the Lok Sabha said the government has constituted a high empowered monitoring committee for complete evaluation and review of the EPS, 1995. The committee has recommended, inter-alia, enhancement of monthly pension with fulfilling of certain conditions, as per the minister’s reply.
“It is not possible to increase minimum monthly pension amount without compromising the financial viability of the Scheme (EPS-95) and/or additional budgetary support,” Gangwar said.
The government has, for the first time, started providing a minimum pension of Rs 1,000 per month to the pensioners under EPS, 1995 from September 1, 2014 by providing additional budgetary support keeping the widespread demands although there is no provision in the Scheme for budgetary support.
The minister also explained to the House that Employees’ Pension Scheme (EPS), 1995 is a ‘Defined Contribution-Defined Benefit’ Social Security Scheme.
As per the provisions of this scheme, the pensioners are given pension from the pooled account in which 8.33% of the employee’s pay (statutory limit is Rs 15,000 per month) is contributed by the employer and 1.16% of the employee’s pay (up to Rs 15,000) is contributed by the central government.
The amount of member’s pension is determined on the basis of the period of service and the salary on which a contribution has been made by a member in the pension fund, the minister further explained.
The trade unions have been pressing for a higher minimum monthly pension under the EPS-95. Initially, they had proposed to provide at least Rs 3,000 per month to pensioners under the scheme. Later factoring in the rising cost of living index, some of them also demanded a minimum monthly pension of Rs 5,000 and even higher amounts under the scheme.
The pension under the EPS-95 is not index or inflation-linked and it remains stagnant throughout. The EPS-95 scheme is run by the Employees’ Provident Fund Organisation (EPFO).