A government-appointed expert committee on pension reforms has recommended hike in retirement age to 60 years in the private sector in a move with significant repercussions for employment plans and post-retirement benefits.
Junior labor minister Harish Rawat told Times of India that it is a tedious task to ensure that pensioners get higher minimum pension and the coverage increases but the task if ensuring higher contributions in respect of limited resources will be attempted.
From Timesofindia.indiatimes.com:
The recommendation is part of a package of changes the panel has suggested to Employees Pension Scheme-1995 — raising retirement pension to a minimum of Rs 1,000 from a lowly Rs 350-400, and of the wage ceiling for EPS from Rs 6,500 to Rs 10,000. The two moves are supposed to better reflect the real value of money.
While the recommendation is meant for only those covered by EPS, it can set the trend for raising of retirement age across-the-board.
The committee said the government can switch to a new PF-cum-pension annuity scheme in place of EPS or make amendments to it. Catering to 4.5 crore employees, EPS — formed with 8.33% of employer’s contribution to PF and 1.16% from government — is running a deficit of Rs 69,834 crore. The panel was asked to suggest measures to make the scheme sustainable.
Junior labour minister Harish Rawat told TOI, “It is a challenging task to ensure that pensioners get higher minimum pension and the coverage increases but we have to ensure higher contributions in view of limited resources.” Under the PF-cum-annuity scheme, each employee will have personal accounts for PF and for Annuity Contribution.
The projected monthly annuity for an employee retiring at the age of 60 years on a wage of Rs, 23,467 is between Rs. 19,000 and Rs. 26,000.
nice and thanks.