EPF Pensioners May Have to Exchange Bonus for Pension Hike

The government may raise the minimum pension to Rs.1,000 per month for the employees contributing to Employee Provident Fund Organisation (EPFO) but, for this pension hike, employees have to sacrifice the bonus that they get after 20 years of pensionable service.

This bonus can be retained if the eligibility age for pension can be increased to 60 years from the current eligibility age of 58 years. This decision can bring additional Rs.539 crore required to provide the proposed plan of pension hike.

The policy making body, the Central Board of Trustees will soon examine these two proposals. But the trade unions have expressed anger at the government saying that, government is making workers pay for something which is actually its responsibility.

One of the officials of AITUC, said that they don’t agree with either of the proposals as in both cases the government is taking money out of the worker’s pockets. And it is the government that takes credit at the end. He also said that it is unfortunate that the government is trying to pass on the entire burden to workers.

As on March 31, 2010, there are more than 35 lakh pensioners contributing to EPFO, of which 14 lakh get a monthly pension less than Rs.500. A government official said that, the labour ministry is also in the favour of exchanging bonus for minimum pension of Rs.1,000 as it felt the savings generated will be sufficient to meet the additional cost and also support 5% relief to all pensioners who are drawing more than Rs.1,000 per month.

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