Not considering DA-linked pension for EPFO members: Govt

Not considering DA-linked pension for EPFO members: Govt

“No proposal is under consideration of the Government at present for providing inflation-linked Dearness Allowance (DA) to pensioners of EPS, 1995,” said Labour Minister Bandaru Dattatreya in a written reply to Rajya Sabha.

The government is not considering inflation-linked pension for the subscribers of Employees’ Pension Scheme 1995 run by retirement fund body EPFO as the value of benefits cannot be left open-ended, Parliament was informed on Wednesday.

“…no proposal is under consideration of the Government at present for providing inflation-linked Dearness Allowance (DA) to pensioners of EPS, 1995,” said Labour Minister Bandaru Dattatreya in a written reply to Rajya Sabha.
Elaborating further, the minister said, “The value of benefits cannot be left open-ended by linking it (pension) with inflation which is variable.”

According to the statement, the issue of index-linking of pension by fully neutralising inflation was considered by the Expert Committee constituted by the government in 2009 for review of EPS, 1995 and the same was found not feasible in the case of a funded scheme like EPS, 1995 wherein contribution of the employer and Government is at a fixed rate of 8.33 per cent and 1.16 per cent respectively.

The minister, however, informed the House that the government has notified a minimum pension of Rs 1,000 per month to the pensioners under the EPS 1995 from September 1, 2014 for the year 2014-15, which is continued beyond March, 2015 without any break.

Unions have been demanding indexing of pension under the EPS 1995 for providing social security to formal sector workers who are subscribers of the Employees Provident Fund Organisation.

“We are demanding a minimum monthly pension of Rs 3,000. Besides, government should take steps to increase the pension contribution from present 9.49 per cent of basic wages to over 20 per cent for linking it with the inflations. The enhanced contribution should come from employer and government,” said All India Trade Union Congress Secretary and an EPFO Trustee D L Sachdev.

He was of the view that indexing of pension is viable only after enhancing EPS 1995 contribution to over 20 per cent of the basic wages.

Source : Businesstoday.in