Centre to take a call on making PF pension proportional to salary

New Delhi: The government will hold talks on Thursday over providing Provident Fund pension proportional to the actual salary, Union Minister of State Santosh Kumar Gangwar has told office-bearers of the All-India Coordination Committee of EPF Pensioners Association who had come to submit a petition in this regard.

The plea sought the raising of minimum pension to Rs 9,000. It pointed out that though the minimum pension was raised to Rs 1,000, majority of pensioners are only getting less than Rs 1,000. It also sought full pension after 100 months to those who have taken commutation.

The latest developments follow the review of interest on Employees’ Provident Fund last April.

PF interest rate

In April, the Union Finance Ministry had given nod for 8.65% interest on Employees’ Provident Fund For 2018-19. This will benefit more than six crore workers in the formal sector.

The interest rate on EPF was hiked to 8.65 per cent for the last fiscal from 8.55 per cent provided in 2017-18.

Then the government had retained the interest rate for General Provident Fund (GPF) and other related schemes at 8 per cent for the April-June quarter.

The rate is in line with that of Public Provident Fund, PTI had reported.

The interest rate on GPF was at 8 per cent in the January-March quarter of 2018-19.

"It is announced for general information that during the year 2019-20, accumulations at the credit of subscribers to the GPF and other similar funds shall carry interest at the rate of 8 per cent with effect from April 1 to June 30, 2019," a Department of Economic Affairs notification had said in April.

The interest rate will be applicable on provident funds of central government employees, railways and defence forces.

Pension option for retired insurance staff

In March the PTI had reported that the government had decided to give one more pension option as retirement benefit to officers and staff who missed the opportunity in the past. This bonanza will benefit over 42,000 employees of public sector insurance companies.

This benefit is applicable to those who have joined any of the Public Sector Insurance Companies (PSICs) on or before June 28, 1995.

"Govt. approves one more pension option for left over employees of Public Sector Insurance Companies who joined on or before 28.06.1995. To benefit 42720 employees including 10720 senior citizens," the then Finance Minister Arun Jaitley had said in a tweet.

These employees had opted for contributory provident fund instead of pension option.

Of the total beneficiaries, 24,595 are of LIC and 18,125 of five general insurance companies -- GIC, New India Assurance Company Ltd, National Insurance Company Ltd, Oriental Insurance Co Ltd, United India Insurance Co Ltd, an official statement said.

"In order to mitigate the hardship of such employees of whom many have retired, Government has decided, as a welfare measure, to allow one more opportunity to employees of PSICs who joined service on or before June 28, 1995, to opt for the Pension scheme of their respective organizations, in lieu of Contributory Provident Fund," Financial Services Secretary Rajiv Kumar said.

Pension was introduced as a retirement benefit in PSICs with effect from June 1995, it said.

In April 1997, employees of LIC and General Insurance Companies namely GIC, New India Assurance Company Ltd, National Insurance Company Ltd, Oriental Insurance Co Ltd, United India Insurance Co Ltd, who joined service on or before 28 June 1995 were given another opportunity to opt for Pension as a retirement benefit.