EPFO to Consider retirement age Raised to 60 Years

EPFO to consider raising retirement age to 60yrs in February 5 meet

NEW DELHI: EPFO’s apex decision making body the Central Board of Trustee (CBT) will consider a proposal to raise the retirement age of organised sector workers to 60 years for its pension at a meeting scheduled for Wednesday.

Besides, the CBT in this meeting will also deliberate on a proposal to withdraw two years bonus under the pension scheme provided to subscribers after rendering 20 years of pensionable service.

These proposals are included in the agenda for the CBT meeting scheduled on February 5 to be chaired by Labour Minister Oscar Fernandes.

At present, under the Employees’ Pension Scheme(EPS-95), the subscribers of Employees’ Provident Fund Organisation (EPFO) cease to be a member of the pension scheme and can apply for fixation of his/her pension. Thus, he cannot contribute to the scheme after the age of 58 years.

However, there is no age bar for contributing to the Employees’ Provident Fund Scheme (EFF) 1952 and Employees’ Deposit Linked Insurance (EDLI) Scheme 1976 run by the EPFO, an official said.

The Finance Ministry in its memorandum to Labour Ministry has proposed these amendments in the EPS-95 after giving its concurrence for providing a minimum entitlement of Rs 1,000 minimum monthly pension under the scheme.

The Finance Ministry is of the view that raising the retirement age for this purpose will help subscribers accumulate a bigger corpus while delaying the pay-out by two years.

The proposal, if approved, would immediately benefit 27 lakh pensioners. At present, there are about 44 lakh pensioners. Of this 27 lakh, including 5 lakh widows, get less than Rs 1,000 a month.

The Finance Ministry has already agreed to pay Rs 1,217 crore during 2014-15 for ensuring minimum pension of Rs 1,000 per month under the pension scheme.

During the meeting the, CBT is likely to approve the proposal for amending the the EPS-95, EPF and EDLI scheme to enhance the maximum wage ceiling to Rs 15,000 per month from Rs 6,500 per month.

At present, EPFO does not cover organised workers under its social sector schemes whose basic wages including basic pay and dearness allowance exceed Rs 6,500 at the time of joining of service.

Besides other things, the trustees will also consider the proposal for computing the pensionable salary. It is proposed to calculate pensionable salary on the basis of average of salary last 60 months instead of 12 months presently.

The pensionable salary is used for fixing pension of the EPFO subscribers after attaining the age of 58 years.

Source: http://economictimes.indiatimes.com