New Delhi: Retirement fund body EPFO on Monday said it has 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.
“The Employees’ Provident Fund Organisation (EPFO) released Rs 868 crore pension along with Rs 105 crore arrear on account of the restoration of commuted value of pension,” it added.
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 lakhs pensioners catered through its 135 regional offices.
EPFO officers and staff battled all odds during this COVID-19 lockdown period and processed pension payment for May, 2020 to ensure credit of pension in the pensioners bank account on schedule.
Earlier in February, the labour ministry has implemented EPFO’s decision to restore pension commutation under EPS-95, benefitting 6.3 lakh pensioners.
Pension commutation refers to part-withdrawal of fund in advance by a subscriber, who then gets reduced pension amount for 15 years.
With the ministry’s decision, these pensioners are entitled to receive their full pension after completion of 15 years.
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 September 25, 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 September 25, 2008.
The provision for pension commutation has been withdrawn by EPFO. Now, the facility has been restored for all those who opted for it on or before September 25, 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.