Kannur: Norms of the Employees Provident Fund pension scheme are proving to be an impediment in providing complete benefits of the scheme to the subscribers.
A notification issued by the Center to provide enhanced pension in proportion to the salary contribution of the subscribers had come as a relief to scores of employees and pensioners, but the norms of the scheme could likely deny its due benefit to the subscribers.
The average of the last 10 months salary is calculated for finalizing the monthly pension of central and state government employees.
The monthly EPF pension is finalized on the basis of the salary of the last 60 months.
This norm can drastically reduce the basic pay for the EPF pensioners.
Trade unions have been demanding to fix the monthly pension on the basis of the salary drawn during the last 12 months of a subscriber’s service.
There are anomalies in the formula fixed for finalizing the monthly pension amount too.
An amount comprising the basic pay and dearness allowance would be multiplied with the total service of an employee and would be divided by 70 for arriving at the monthly EPF pension amount.
Who gets full benefit?
If an employee is getting grade pay or variable pay that too would be merged with the basic pay for calculating the pension. For getting the full complement of the pension, an employee should have at least 35 years service, half of 70.
As per the latest pay commission report, central government employees would be eligible for full pension on completing 20 years service and in state service it is 25 to 30 years.
The new EPF scheme was introduced in 1995. Hence the service from 1995 alone would be considered for the scheme.
An employee would have to wait till 2028 to get the full benefit of the scheme. On completing 28years of service, two years would be given in addition for providing the full pension benefit.
All subscribers of the scheme would not get the benefit of the new scheme. Many institutions have not remitted their mandatory 12 percent employer’s contribution and have limited it to the component fixed by the EPF.
A large section of employees belong to this genre. A majority of the pensioners are getting only a pension between Rs.1,000 and Rs.2,000.
About 20 lakh pensioners are getting only Rs.1,000. A direction to raise the minimum pension to Rs.2,000 has not been implemented so far.
No periodical DA hike
The periodical DA hike enjoyed by central and state government employees has not been made applicable to EPF pensioners.
They will be getting only a fixed sum in this regard. They may get an enhancement for the time being, but its value may not go up in due course.
The EPF has scrapped the pension commutation facility too for its subscribers.
Unions have been demanding a revival of the commutation facility also.
Those who had commuted their pension are now getting only Rs.500 per month. The norm that they are eligible for the full amount after 100 months of commutation has not yet been implemented.