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Provident fund body to consider raising retirement age to 60 years on February 5

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The Central Board of Trustee (CBT), the apex decision making body of the Employees Provident Fund Organisation (EPFO), will consider a proposal to raise the retirement age of organised sector workers to 60 years for its pension at a meeting scheduled for Wednesday.

Besides, the CBT in its meeting on February 5 will also deliberate on a proposal to withdraw two years bonus under the pension scheme provided to subscribers after rendering 20 years of pensionable service.

These proposals are included in the agenda for the CBT meeting scheduled on February 5 to be chaired by Labour Minister Oscar Fernandes.

At present, under the Employees’ Pension Scheme (EPS-95), EPFO subscribers cease to be members of the pension scheme and can apply for fixation of their pension after the age of 58 years. Thus, they cannot contribute to the scheme after the age of 58 years.

However, there is no age bar for contributing to the Employees’ Provident Fund Scheme (EFF) 1952 and Employees’ Deposit Linked Insurance (EDLI) Scheme 1976 run by the EPFO, an official said.

The Finance Ministry in its memorandum to Labour Ministry has proposed these amendments in the EPS-95 after giving its concurrence for providing a minimum entitlement of Rs. 1,000 minimum monthly pension under the scheme.

The ministry is of the view that raising the retirement age for this purpose will help subscribers accumulate a bigger corpus while delaying the payout by two years.

The proposal, if approved, would immediately benefit 27 lakh pensioners. At present, there are about 44 lakh pensioners. Of this 27 lakh, including 5 lakh widows, get less than Rs. 1,000 a month.

The Finance Ministry has already agreed to pay Rs. 1,217 crore during 2014-15 for ensuring minimum pension of Rs. 1,000 per month under the scheme.

In the meeting, CBT is likely to approve the proposal for amending the EPS-95, EPF and EDLI scheme to enhance the maximum wage ceiling to Rs. 15,000 per month from Rs. 6,500 per month.

At present, the provident fund body does not cover organised workers under its social sector schemes whose basic wages including basic pay and dearness allowance exceed Rs. 6,500 at the time of joining of service.

Besides other things, the trustees will also consider the proposal for computing the pensionable salary. It is proposed to calculate pensionable salary on the basis of average of salary last 60 months instead of 12 months at present.

The pensionable salary is used for fixing pension of the EPFO subscribers after attaining the age of 58 years.

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