Budget 2014: Rs 1000 Monthly Pension a Reality Now

The minimum monthly pension of Rs 1,000 under EPS-95 scheme run by retirement fund body EPFO has become a reality and will immediately benefit 28 lakh pensioners who get less than this amount at present.

While announcing that government is notifying the minimum pension under the Employees' Pension Scheme-1995 (EPS-95), Finance Minister Arun Jaitley also stated in his budget speech today that wage ceiling covering organised sector workers under schemes run by EPFO has been raised to Rs 15,000 per month from existing Rs 6,500.

"Government is fully committed to the social security and welfare of employees serving in the organised sector. The Government is notifying minimum pension of Rs 1,000 per month to all subscriber members of EPS-95 scheme and has made an initial provision of Rs 250 crore in the current financial year to meet the expenditure," Mr Jaitley said.

He said, "Further, increase in mandatory wage ceiling of subscription to EPS-95 from Rs 6,500 to Rs 15,000 has been made and a provision of Rs 250 crore has been provided in the current budget."

At present, workers whose basic wage at the time of joining is up to Rs 6,500 per month, including basic pay and dearness allowance, can be subscribers of the EPFO schemes.

According to the EPFO's estimates, the raising of wage ceiling to Rs 15,000 per month is expected to bring 50 lakh more workers under the ambit of social security schemes run by it.

Mr Jaitley also said that for the convenience of the subscribers, Employees' Provident Fund Organisation (EPFO) will launch the "Uniform Account Number" (UAN) Service for contributing members to facilitate portability of Provident Fund accounts.

EPFO has planned to launch the UAN for its over five crore subscribers by October this year.

UAN will help EPFO to provide services to the subscribers at par with core banking services. Thereby the subscribers would not have to apply for PF account transfer claim on changing jobs.

According to the earlier estimates of the Labour Ministry, the government will have to provide an additional amount of around Rs 1,217 crore to ensure a minimum pension of Rs 1,000 for 2014-15. The decision to provide this entitlement under EPS-95 was taken by the Union Cabinet in its meeting held on February 28 but could not be implemented due to commencement of election process for Lok Sabha.

This will immediately benefit about 28 lakh pensioners, including 5 lakh widows. In all, there are 44 lakh pensioners under the EPFO scheme.