Trustees of retirement fund body Employees Provident Fund Organisation (EPFO) on Wednesday approved a proposal to provide a monthly pension of minimum Rs 1,000, a decision that will immediately benefit about its 28 lakh pensioners.
The Central Board of Trustees (CBT), the apex decision-making body of EPFO, also decided to raise the monthly wage ceiling to Rs 15,000 from Rs 6,500 by amending the Employee Provident Fund scheme, 1952, so that more workers can be brought under its various social security programmes.
"The board has decided to approve the proposed amendments in the schemes to ensure that Rs 1,000 minimum monthly pension under EPS-95 and also increased the wage ceiling to Rs 15,000 per month," Labour Minister Oscar Fernandes, who chaired the CBT meeting, told reporters here.
At present, workers getting basic wages, including basic pay and dearness allowance, of up to Rs 6,500 are mandatorily covered under the ambit of Employees' Provident Fund Organisation (EPFO).
According an EPFO official, the Labour Ministry will soon move proposal before the Union Cabinet for its approval for the Rs 1,000 minimum monthly pension.
"We have also reduced the administrative charges paid by the employers. Their burden would increase with the increase in wage ceiling," the Minister said.
The board has also decided to reduce administrative charges from 1.10 per cent of the basic wage, including basic pay and dearness allowance, to 0.85 per cent. Besides, the trustees have also approved a proposed change in the methodology of computing the pensionable salary.
The pensionable salary will be calculated on the basis of average salary of the last 60 months instead of 12 months as provided in the EPS-95.
However, the proposed change in the methodology for computing pensionable salary was approved with a dissent note from the trade unionist members of the CBT.
The Employee Provident Fund Organisation (EPFO) runs social security programmes Employees Provident Fund Scheme 1952, Employees Pension Scheme 1995 and Employees Deposit Linked Insurance Scheme 1976.