Government approves Rs 1,000 minimum monthly pension in perpetuity

NEW DELHI: In a move that will benefit 20 lakh pensioners under the retirement fund body EPFO, the Cabinet on Wednesday gave its approval to the labour ministry’s proposal to extend the minimum pension of Rs 1000 till perpetuity. The scheme, which was effective from September 2014, had expired on March 31, 2015 after which EPFO had restored to the earlier provision that had led to widespread protests from trade unions.

“The Union Cabinet today gave its approval for continuation of the minimum pension of Rs 1000 per month to the pensioners of Employees’ Pension Scheme, 1995 (EPS) beyond the financial year 2014-15 on perpetual basis,” an official statement said.

According to the statement, the Cabinet has also approved corresponding grant of continuous annual budgetary support for implementing the minimum pension which will be to the tune of Rs 850 crore per year on a tapering basis.

“Providing a minimum pension of Rs 1000 per month is an effort to provide meaningful subsistence to pensioners who have served in the organized sector. The present proposal is likely to benefit approximately 20 lakh pensioners under EPS, 1995,” it said.

A large number of member pensioners under the EPS, 1995 received low pensions, either because it was calculated on the basis of pensionable service or on average of last sixty months’ wages, which was not commensurate with the growing cost of living.

The UPA-II government had in February 2014 accorded approval to the proposal for ensuring a minimum pension of Rs 1000 per month for the pensioners of EPS for the financial year 2014-15 and provided a budgetary support of Rs 1217.03 crore. However, the proposal could only be implemented by the BJP-led NDA government with effect from September 1 last year after necessary amendments to the EPS Act.

The number of pensioners who have benefitted from the enhanced pension under the scheme averages 18 lakh in the seven months from September–March 2014-15. The total outgo under the revised pension stood at Rs 1139.12 crore as against the original payout of Rs 716.7 crore and the balance of Rs 422.4 crore was provided by the Centre as grant to EPFO.