Panel recommends ex gratia pension for participatory pensioners with less than 10 years of service

Representational image: Shutterstock/Andrii Yalanskyi

Thiruvananthapuram: The D Narayana Commission appointed by the government has recommended that beneficiaries of the participatory pension scheme with less than 10 years of service should be paid ex gratia pension as well. This payment will be in addition to the participatory pension they will draw.

The committee has recommended that up to Rs 8,000 be paid as ex gratia pension if the beneficiary has 10 years of service. The recommendation was made to address complaints that those who have fewer years of service would receive only small amounts as pension under the participatory pension scheme.

The report, which has not been released by the government, says that there are no legal impediments to withdrawing the participatory pension scheme, but such an action would bring a huge financial burden on the government.

Committee’s recommendations
The government’s share should be increased by 4 per cent if the scheme continues
The government’s contribution of 10 per cent made to the pension fund should be increased to 14 per cent. Since those who have less than 10 years of service are not eligible for pension under the statutory pension scheme, they are given ex gratia pension. This benefit should be extended to participatory pensioners also.

Employees should be given an option if the scheme is withdrawn
For those with over 30 years of service, the participatory pension is better than the statutory pension. Therefore, if the scheme is withdrawn, the employees should be given the option of choosing their pension scheme. Members of the participatory pension can withdraw up to 60 per cent of the employees’ shares deposited in the fund. However, there is no such provision under the statutory pension.

Ministerial-level committee’s report in 3 months
The state cabinet has entrusted a ministerial-level committee with the task of deciding on the D Narayana Commission’s report. It has been asked to submit its report within three months. If the committee keeps to the deadline, a decision will be made before the Lok Sabha elections.

“If the participatory pension continues, the government’s expenditure for paying the pension will decline by 2040. Gradually, the government’s outgo will only be the share paid into the pension fund. Only 3 per cent of the revenue will be needed for this purpose in place of the 20 per cent as at present,” said D Narayana, chairman of the Participatory Pension Review Commission.

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