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An increase in minimum pension payout under the Employees' Pension Scheme, 1995 (EPS-95) is not possible without compromising the scheme’s financial viability or additional budgetary support, the government said on Monday.
Labour Minister Santosh Gangwar, in a written reply in the Lok Sabha, said the government had 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.
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Employees pension scheme: Hike minimum payout to ₹3,000, says House panel
Says amount currently being paid is grossly inadequate, wants other issues addressedFor the first time, the government has started providing a minimum pension of ₹1,000 per month to the pensioners under EPS, 1995 from September 1, 2014, by providing additional budgetary support keeping the widespread demands. However, 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.
Defined Contribution-Defined Benefit scheme
As per the provisions of this scheme, the pensioners are given pension from the pooled account in which 8.33 per cent of the employee's pay (statutory limit is ₹15,000 per month) is contributed by the employer and 1.16 per cent of the employee’s pay (up to ₹15,000) is contributed by the central government.
The amount of member’s pension is determined based on the service period and the salary on which a member in the pension fund has contributed, the minister further explained.
TUs demand higher pension
The trade unions have been pressing for a higher minimum monthly pension under the EPS-95. Initially, they had proposed to provide at least ₹3,000 per month to pensioners under the scheme. Later factoring in the rise in the cost of living index, some also demanded a minimum monthly pension of ₹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)
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