HEAD OFFICE MINISTRY OF LABOUR & EMPLOYMENT,
GOVERNMENT OF INDIA BHAVISHYA NIDHI BHAWAN,14,
BHIKAUJI CAMA PLACE, NEW DELHI 110066
No. Pension / 2021 / 41217 / 4519 Date: 05 APR 2022
xxxxxxxxxxxx,(For Security reason name & add of eps 95 pensioner are not shown.
Sub: General grievance- Regarding.
Sir / Madam, Please refer to your letter dated 08.12.2021. With regard to the enhancement of minimum pension, it is informed that the Employees Pension Scheme 1995 is a self-funded Scheme with contributions @ 8.33 percent of wages from employer and 1.16 percent of wages by the Central Government.
All benefits under the scheme are paid out of such accumulations. The fund is valued annually and additional reliefs are paid if the position of the fund so permits.
Since the year 2000, the fund ran into deficit and no additional reliefs could be paid. In spite of this, the Central Government has enhanced the minimum pension to Rs. 1000 / – p.m. by providing budgetary support keeping the widespread demand in view even though there is no provision in Scheme for such budgetary support.
Further, as per recommendations made by High Empowered Monitoring Committee constituted by the Government, a proposal increasing the minimum pension under EPS, 1995 from Rs. 1000 to Rs. 2000 per month by providing additional budgetary support, was sent to the Ministry of Finance.
EPFO’s proposal vide letter dated 12.03.2020 was also considered by the Ministry before forwarding the proposal to the Ministry of Finance. However, the Ministry of Finance. did not agree mainly due to financial restraint.
With regard to delinkage of pension under EPS, 1995 from Dearness Allowance, it is informed that the issue of index linking of pension by fully neutralizing inflation was considered by the Expert Committee constituted by the Central Government in the year 2009 for review of EPS, 1995 and the same was found not feasible in the case of a funded scheme like Employees ‘ Pension Scheme, 1995.
In the Employees ‘ Pension Scheme, 1995 the contribution of the employer and Government is at a fixed rate of 8.33 % and 1.16 %. Therefore, the value of benefits cannot be left open-ended by linking with inflation as inflation is variable.
Therefore, to ensure the sustainability and viability of defined contribution and defined benefits schemes like EPS, 1995 feasibility of providing such benefit is required to be kept in view.
It is also informed that at present no proposal for providing inflation-linked DA for EPS pension is under contemplation, ( This issues the with the approval R.P.F.C – 1 ( pension ) ).
( Sunil Kumar Toura )
Assistant P.F Commissioner ( Pension )
Copy to: – Under Secretary, SS – II w.r.t to Mol & E-Diary No 586702-55-11 dt. 27.01.22 for infn pl.