Labour minister Oscar Fernandes has hurriedly called another meeting of the Central Board of Trustees this week, less than a month after the EPFO’s apex decision making body met, to announce a slew of pre-poll goodies including a minimum monthly pension of Rs 1,000 and a hike in the wage limit to Rs 15,000.
“The CBT will be meeting on February 5 to discuss long pending issues on increasing the wage cap for EPF subscribers and a minimum monthly pension,” said a person privy to the development.
After clearance from CBT, the labour ministry is expected to take these proposals to the Cabinet for final approval.
A higher wage cap is expected to provide social security benefits to at least 50 lakh more workers who will be brought into the EPFO’s fold as well as the existing 44 lakh pensioners under the related EPS. Besides, the CBT is also expected to discuss a proposal to increase the retirement age for workers eligible for the Employees’ Pension Scheme to 60 years. At present, workers are a member of the scheme till 58 years after which they are eligible for a monthly pension.
But the finance ministry is of the view that increasing the age limit would not only help members accumulate more savings but would also delay the pension payout.
As reported by The Indian Express earlier, the finance ministry has finally agreed to the long pending proposals but has opted to provide a top up of about Rs 1,200 crore annually to fund the pension hike instead of the ministry proposal to increasing the subsidy payout from 0.63 per cent from the current 1.16 per cent subsidy.
It has also agreed to increase the minimum wage ceiling that is capped at Rs 6,500 per month to Rs 15,000 per month. The move will help provide social security benefits to a large number of formal sector workers who have slipped out of the EPF ambit due to the low wage ceiling.
Further, the CBT is also expected to consider a plan to widen the coverage of establishments under the scheme by including firms that have a minimum of 10 workers. At present, only establishments with 20 workers or more are mandated to contribute PF.