EPS pensioners could get a small raise

Nagpur: With a marginal surplus reported in the Employees' Pension Scheme (EPS) corpus, it has been internally suggested that the pensioners should be granted a small hike. EPS 1995, which provides pension to around 55 lakh retired private sector employees, had been under deficit for more than 15 years. At one time, the gap was estimated to be as much as Rs40,000 crore though a relook was done later. The latest report submitted a month ago shows a marginal surplus and discussions are on, sources related to the development said.

EPS is managed by Employees Provident Fund Organization (EPFO), an agency under Union Ministry of Labour. The pension fund is built from employers' contribution towards the PF account. Sources said it was suggested that the pensioners should be passed on the surplus as interim benefit. It has been proposed the pension could be increased by 3% to 4%. Thus, those getting a minimum pension of Rs1000 will start getting around Rs1030. The matter is under consideration with more meetings likely.

The pension at present has been capped at Rs7,500 per month. This is after the upper limit for PF contribution was increased to a monthly salary of Rs15,000 from Rs6,500 in 2014. Thus the maximum hike one may get would be of around Rs300, if the suggestion is approved.

After the government introduced minimum pension of Rs1000, it also barred new entrants into EPFO fold from any pension benefit if the salary was over Rs 15,000. The only ones who can benefit substantially from the hike are ones who had opted for higher contribution towards pension scheme. This facility has now been withdrawn. Sources said after increasing pension, the corpus may once again run into deficit. Though it will be only of a few hundred crores that the government may cover up.

Last fortnight the EPFO issued a notification clarifying that despite the norm of minimum pension being at Rs1000, the payout will be reduced if the pensioner had availed commutation. Commutation means that a part of the pension being withdrawn in advance. There was a confusion over payment to those who had taken commutation. In many cases, a lower pension was paid that led to complaints. The issue has now been settled.

Even the facility of commutation was stopped over five years ago. So the rule will apply to old cases. There will be a similar deduction in case the pension has been availed before the retirement age of 58 years, the source said.

In a Nutshell

* EPS pensioners may get a hike of 3% to 4%

* At present, maximum pension is set at Rs7,500 a month

* Minimum pension is Rs1,000/month

* So the raise may range from Rs30 to Rs 300

* The account will run into deficit after the raise