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EPFO releases pension and arrears, accepts workers demand for commutation; here's all you need to know

FP Staff

The Employees' Provident Fund Organisation (EPFO) on Monday released Rs 868 crore pension along with Rs 105 crore arrears on account of the restoration of commuted value of (higher) pension.

On the recommendation of EPFO's apex decision making body Central Board of Trustees, the government had accepted one of the long-standing demands of workers to allow restoration of commuted value of pension after 15 years, a labour ministry statement said.

Earlier, there was no provision for restoration of commuted pension and the pensioners continued to receive reduced pension on account of commutation lifelong, it said.

This is a historical step for the benefit of pensioners under EPS-95 (Employees' Pension Scheme-1995). The EPFO has more than 65 lakh pensioners catered through its 135 regional offices.

Restoration of pension

On 20 February, the ministry notified the decision of EPFO to restore pension of those who opted for commutation of their pension on or before 25 September, 2008.

As many as 6.3 lakh pensioner had opted for commutation of their pension and got a lump sum at the time of retirement from their pension fund on or before 25 September, 2008.

Under the commutation, monthly pension used to be cut by one-third for the next 15 years and the reduced amount was given in lump sum. After 15 years, pensioners were entitled to get the full pension.

In August 2019, the EPFO's apex decision-making body -- Central Board of Trustees headed by the labour minister -- approved the proposal to restore commutation of pension for 6.3 lakh pensioners who had opted for the benefit.

12 lakh members withdraw non-refundable advance

On 28 March, the EPFO allowed formal sector workers to withdraw a non-refundable advance from their retirement savings to deal with the hardships due to the lockdown.

Unveiling the fifth and final tranche of the Rs 20-lakh crore economic package, Finance Minister Nirmala Sitharaman said 12 lakh members of the EPFO have withdrawn as non-refundable advance of Rs 3,360 crore during the past two months.

The EPFO, under the Union Labour and Employment Ministry, has settled a total of 12 lakh claims under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) package.

The provision for a special withdrawal from the EPF Scheme to fight the COVID-19 pandemic is part of the PMGKY scheme announced by the government and an urgent notification on the matter was made to introduce a para 68 L (3) of the EPF Scheme on 28 March, 2020.

Under this provision non-refundable withdrawal to the extent of the basic wages and dearness allowances for three months or up to 75 percent of the amount standing to member's credit in the EPF account, whichever is less, is provided.

--With PTI inputs

Also See: Coronavirus Lockdown: Govt implements cut in employees' provident fund contribution to 10% for May, Jun, July

EPFO releases Rs 868 crore pension along with Rs 105 crore arrear for commutation

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