Labour committee asks Centre to increase minimum PF pension

Sub : Schemes

Sec : Economy

Context:

The Parliamentary Standing Committee on Labour, led by Basavaraj Bommai, has recommended an increase in the minimum pension provided by the Employees Provident Fund Organisation (EPFO) under the Employees Pension Scheme (EPS).
This recommendation was made after considering the demands from trade unions and pensioner associations for a revision of the pension amount.

Issues with current Pension system:

Under the EPS, the minimum pension has been fixed at ₹1,000 per month since 2014.
In 2023-24, there were 20,64,805 pensioners receiving the minimum pension of ₹1,000 per month.
Over a decade has passed since this amount was set, and the Committee acknowledged that the cost of living has significantly increased in 2024 compared to 2014.
In response to concerns raised by various stakeholders, including pensioners and trade unions, the Committee recommended a revision of the minimum pension amount.

Employees’ Pension Scheme (EPS):

EPS was introduced in 1995 and is administered by the Employees’ Provident Fund Organisation (EPFO), under the Ministry of Labour and Employment.
It provides pension benefits to employees in the organized sector upon retirement.
Employees who are members of the Employees’ Provident Fund (EPF) automatically become members of EPS.
Both employer and employee contribute 12% of the employee’s monthly salary (basic wages plus dearness allowance) to the EPF scheme.

Government contribution:

The government contributes 16% of wages to the EPS, with a wage ceiling of ₹15,000 per month.
A grant-in-aid is provided to cover the difference between the minimum pension of ₹1,000 and the actual pension that members receive.

Implementation of Labour Codes:

The Committee also addressed the delay in the implementation of the four Labour Codes, which are still pending.
The report emphasized that it is the statutory obligation of States and Union Territories (UTs) to prepare the necessary rules for the implementation of these codes.

Parliamentary Committees:

Indian Constitution mentions two kinds of Parliamentary Committees: Standing Committees and Ad Hoc Committees.
The Standing Committees are permanent (constituted every year or periodically) and work on a continuous basis, while the Ad Hoc Committees are temporary and cease to exist on completion of the task assigned to them.
The report of the committee is of a recommendatory nature. The government can choose to accept or reject its recommendations.