EPFO may fix minimum pension at Rs 1,000 per month Wednesday
New Delhi: Retirement fund body EPFO could take a final call on fixing the minimum pension for its subscribers at Rs 1,000 per month, during a meeting of the Central Board of Trustees (CBT) scheduled Wednesday.
According to an Employees' Provident Fund Organisation's trustee, D L Sachdev, the CBT could fix minimum pension at Rs 1,000 per month for its subscribers.
The proposal is listed on the agenda for the meeting of CBT, the EPFO's apex decision making body.
The trustees body headed by the labour minister, will also discuss the proposal to issue contribution cards similar to bank passbooks to over 4.72 crore subscribers, which would be updated on monthly basis from April 1, this year.
According to EPFO data, as of March 31, 2010, there were 35 lakh pensioners subscribed to the retirement fund body, of which 14 lakh persons get a monthly pension of less than Rs 500.
The number of EPFO pensioners getting a monthly pension of Rs 1,000 is 7 lakh. The data reveals there are cases where pensioners are getting a monthly pension as low as Rs 12 and Rs 38.
As per estimates, the proposal to hike the minimum pension to Rs 1,000 per month will require an additional contribution of 0.63 percent of subscribers' basic pay and dearness allowance to the pension account.
The hike in contribution will be over-and-above the 8.33 percent contributed by employers toward the pension account of employees, as well as the 1.16 percent provided by the government under the scheme.
It is likely that trustees may decide on sharing of additional burden equally by government, employees and employers, a trustee said.
The other important move of the retirement fund body would be to start issuing contribution cards similar to bank passbook from April this year.
At present, it is mandatory for the employers to prepare 'Contribution Cards' and update it every month as per the provisions of the Employees' Provident Fund Scheme 1952, though such cards are not provided to subscribers.
EPFO has proposed to the CBT that this be implemented from April 1, 2012.
The card will also have additional information like date of birth, nomination and family details.