EPFO may fix minimum pension at Rs 1,000 per month tomorrow

NEW DELHI: Retirement fund body EPFO could take a final call on fixing the minimum pension for its subscribers at Rs 1,000 per month, during a meeting of the Central Board of Trustees (CBT) scheduled tomorrow.

According to an Employees' Provident Fund Organisation's trustee, D L Sachdev, the CBT could fix minimum pension at Rs 1,000 per month for its subscribers.

The proposal is listed on the agenda for the meeting of CBT, the EPFO's apex decision making body.

The trustees body headed by the labour minister, will also discuss the proposal to issue contribution cards similar to bank passbooks to its over 4.72 crore subscribers, which would be updated on monthly basis from April 1, this year.

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.

The number of EPFO pensioners getting a monthly pension of Rs 1,000 is 7 lakh. The data reveals there are cases where pensioners are getting a monthly pension as low as Rs 12 and Rs 38.

As per estimates, the proposal to hike the minimum pension to Rs 1,000 per month will require an additional contribution of 0.63 per cent of subscribers' basic pay and dearness allowance to the pension account.

The hike in contribution will be over-and-above the 8.33 per cent contributed by employers toward the pension account of employees, as well as the 1.16 per cent provided by the government under the scheme.