New Delhi: Retirement fund body EPFO has suspended the Rs 1,000 minimum monthly pension scheme from this month, a decision which will hit about 32 lakh pensioners.
The scheme was launched with effect from September 2014, hiking the pension amount to a flat Rs 1,000 per month for those who were getting lower amount earlier.
With the suspension of the scheme, the beneficiaries will get pension at earlier rates.
In a circular to its field offices, the Employees Provident Fund Organisation (EPFO) said it has decided to suspend the scheme in the absence of any direction from the government to continue this benefit beyond March 31.
According to the government notification issued on August 19 last year, the benefit of minimum pension was made effective from September 1 to March, 2015.
"Under the circumstance EPFO cannot go beyond the directions of the government and the provision of the notification dated August 19, 2014, and the payment pension from the month of April 2015 will be released at earlier rates i.E without minimum pension provision," the order said.
At present, EPFO has 49 lakh pensioners under the Employees Pension Scheme run by it.
The scheme was launched with effect from September 2014, hiking the pension amount to a flat Rs 1,000 per month for those who were getting lower amount earlier.
With the suspension of the scheme, the beneficiaries will get pension at earlier rates.
In a circular to its field offices, the Employees Provident Fund Organisation (EPFO) said it has decided to suspend the scheme in the absence of any direction from the government to continue this benefit beyond March 31.
According to the government notification issued on August 19 last year, the benefit of minimum pension was made effective from September 1 to March, 2015.
"Under the circumstance EPFO cannot go beyond the directions of the government and the provision of the notification dated August 19, 2014, and the payment pension from the month of April 2015 will be released at earlier rates i.E without minimum pension provision," the order said.
At present, EPFO has 49 lakh pensioners under the Employees Pension Scheme run by it.
The issue of providing Rs 1,000 minimum monthly pension in perpetuity had come in EPFO's trustees' meet held on December 19. All members of the Central Board of Trustees were in favour of proposal. Thereafter, the proposal was sent to the government for approval.
The EPFO has also suspended the enhanced pension payment to widows, children and orphans under the scheme.
Under the modified scheme, the minimum monthly pension for widows has been fixed at Rs 1,000 and for children at Rs 250 per month. Similarly, the minimum pension entitlement for orphans has been fixed at Rs 750 per month.
For implementing this scheme, the trustees had agreed to other amendments in the scheme which were not in the interest of propective pensioners in future.
Now the amended scheme provides that the pensionable salary will be the average monthly pay drawn during the contributory period of service for 60 months preceding the date of exit from membership of the pension fund.
Earlier the pensionable salary, which became the basis for computation of pension, was an average monthly pay drawn for 12 months. The new rule will be was also made effected from September 1, 2014.
The notification had also provided that those members who had opted for higher pension contributions compared to mandatory requirement as per the prescribed wage ceiling under the scheme, would have to exercise the fresh option in this regard within six month period beginning September 1.
At present, there are EPFO members who had exercised the option of higher contribution towards pension fund under the scheme. They were contributing for pension on over the Rs 6,500 monthly wage ceiling.
The EPFO has also suspended the enhanced pension payment to widows, children and orphans under the scheme.
Under the modified scheme, the minimum monthly pension for widows has been fixed at Rs 1,000 and for children at Rs 250 per month. Similarly, the minimum pension entitlement for orphans has been fixed at Rs 750 per month.
For implementing this scheme, the trustees had agreed to other amendments in the scheme which were not in the interest of propective pensioners in future.
Now the amended scheme provides that the pensionable salary will be the average monthly pay drawn during the contributory period of service for 60 months preceding the date of exit from membership of the pension fund.
Earlier the pensionable salary, which became the basis for computation of pension, was an average monthly pay drawn for 12 months. The new rule will be was also made effected from September 1, 2014.
The notification had also provided that those members who had opted for higher pension contributions compared to mandatory requirement as per the prescribed wage ceiling under the scheme, would have to exercise the fresh option in this regard within six month period beginning September 1.
At present, there are EPFO members who had exercised the option of higher contribution towards pension fund under the scheme. They were contributing for pension on over the Rs 6,500 monthly wage ceiling.
(Zee News)
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