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EPFO subscribers may get a minimum monthly pension of Rs. 1,000

The labour ministry has recommended to the finance ministry to either withdraw the two-year bonus given to EPFO subscribers on completion of 20 years of service or fix minimum pension of Rs. 1,000

August 21, 2012 5:30 IST | India Infoline News Service
The ministry of labour has sent a proposal to the finance ministry to fix minimum pension to EPFO (Employees Provident Fund Organisation) subscribers at Rs. 1,000, no matter what they are contributing to the scheme, according to media reports.

If the proposal is cleared by the finance ministry, then EPFO subscribers may get a minimum monthly pension of Rs. 1,000 after superannuation, the reports added.

The labour ministry has recommended to the finance ministry to either withdraw the two-year bonus given to EPFO subscribers on completion of 20 years of service or fix minimum pension of Rs. 1,000. Currently, subscribers—who complete 20 years of service—is given benefit of additional two years bonus while calculating their pension.

According to the retirement fund body, if this two years bonus is withdrawn, the proposal of fixing minimum pension at Rs. 1,000 would be a revenue neutral exercise apart from pensioners getting about 5% relief. If the finance ministry agrees the proposal to fix minimum pension of Rs. 1,000, then it will have to spend Rs. 5.39 billion every year in addition to its existing payout of Rs. 9.94 billion annually for contributing 1.16% of basic pay and DA (dearness allowance) to the pension fund.

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