Fintotal News Analysis | EPFO Floor Pension to Be Raised to Rs 1000
EPFO Floor Pension to Be Raised to Rs 1000
Ruby Jacob, 21 Aug 2012

Pensioners can look forward to get a minimum pension of Rs 1000 a month if the Labour Ministry has its way. The labour ministry has proposed to the finance ministry to fix the minimum monthly pension of EPFO subscribers at Rs 1000 after superannuation.

If approved EPFO subscribers will draw a minimum monthly pension of Rs 1000 irrespective of their contributions. Who will sponsor the additional Rs 539 crores per year remains an issue of debate.

Based on report in the Times of India, there are 7 lakh EPFO subscribers who get Rs 1,000 or more as pension per month, 14 lakh get less than Rs 500 and others who get as low as Rs 38 and Rs 12 per month out of the 35 lakh pensioners.

Two options are before the government. One is to have the 2-year bonus given to employees completing 20 years cut. The other is to sponsor the full amount by itself.

The labour ministry has proposed two other measures to boost provident fund scenario in India. It has proposed to lower the criterion for minimum number of employees of a firm to 10 from 15 and increase the maximum monthly salary to Rs 15,000 to increase coverage of companies.

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