Cabinet to take call on minimum pension plan of Rs 1,000 per month soon

NEW DELHI: The Cabinet will soon consider the labour ministry’s proposal to extend the minimum pension of Rs 1,000 per month to workers till perpetuity as indecision on this score has led to strong protests from the trade unions ever since the Employees’ Provident Fund Organisation earlier this month restored its original method of determining pension based on the employees’ contribution.

“Labour ministry has already moved a Cabinet note seeking permission to allow EPFO to extend the minimum pension scheme till perpetuity. Though there is a budgetary provision for the same in this year’s budget, we are not authorised to use this money till Cabinet approves it,” a senior labour ministry official told ET.

According to the official, who did not wish to be identified, the proposal is likely to be taken up by the Cabinet next week after Prime Minister Narendra Modi returns from his three-nation tour. The PM is on a visit to France, Germany and Canada between April 10 and 18.

The scheme, which was effective from September last year, costs Rs 800 crore per annum to the Centre and is given as grant to the ministry. Under the scheme, the minimum pension of all the EPFO subscribers has been raised to a flat Rs 1,000 per month, benefiting lakhs of people who were getting a lower amount earlier.

However, in the absence of any authorisation from the government to continue with the provision of minimum pension beyond Rs 1,000 per month, retirement fund body EPFO has suspended the scheme from April 1, a decision which has hit about 32 lakh pensioners. At present, EPFO has 49 lakh pensioners under the Employees’ Pension Scheme run by it.

In a circular issued to its field offices recently, EPFO said it has decided to suspend the scheme in the absence of any direction from the government to continue this benefit beyond March 31. “Under the circumstance EPFO cannot go beyond the directions of the government and the provision of the notification dated August 19, 2014, and the payment pension from the month of April 2015 will be released at earlier rates, without minimum pension provision,” the order said.

This led to widespread protests from all central trade unions, which threatened to go on a nationwide strike against the delay in decision-making. The issue of providing Rs 1,000 minimum monthly pension in perpetuity had come up in the meeting of EPFO’s Central Board ofTrustees on December 19, 2014.