A long-pending proposal to provide a minimum pension of Rs 1,000 per month under Employee's Pension Scheme, 1995 (EPS-95) which can immediately benefit 35 lakh pensioners is under Government's consideration, the Rajya Sabha was informed today.
"A proposal for providing a minimum pension of Rs 1,000 per month to pensioners under EPS-95 is under consideration of the government," Labour Minister Oscar Fernandes said in a written reply.
Under the EPS-95 run by retirement fund body Employees' Provident Fund Organisation (EPFO), employees do not contribute for pension.
The employers contribute 8.33 per cent of the basic wages including basic pay and dearness allowance towards the EPS-95 where as Central Government contributes 1.16 per cent of basic wages from its budget.
The proposal is pending with government for a long time. According to the EPFO estimates, an additional contribution of 0.63 per cent of basic wages by the subscribers is required for providing minimum pension of Rs 1,000 per month.
During the meetings of the EPFO's apex decision making body the Central Board of Trustees headed by Labour Minister, neither employers nor employee representatives agreed to pay this additional contribution of 0.63 per cent.
The unionists and employers representatives did not even agree to share the burden of this additional contribution equally.
Earlier this year, EPFO has made a case for increase in government's contribution to its pension scheme EPS-95 to 1.79 per cent of basic wages from existing 1.16 per cent for ensuring Rs 1,000 per month to pensioners.
According to EPFO data, as of March 31, 2010, there were 35 lakh pensioners subscribed to the retirement fund body, of which 14 lakh persons get a monthly pension of less than Rs 500.
EPFO has a subscriber base of about five crore and manages total corpus of fund including PF and Pension to the tune of Rs five lakh crore.
