THE employees pension scheme (EPS), related to the employees provident fund (EPF) and being implemented from 1995, is to be amended to ensure a minimum pension of Rs 1,000 and also to increase the eligibility wage ceiling to Rs 15,000 per month from the existing Rs 6,500. The decision about it was taken in an urgently called meeting of the Central Board of Trustees (CBT) on February 5. All trade union representatives in the CBT welcomed the much delayed amendments, but raised various points regarding the pension scheme and also on other proposals placed in the meeting. Representative of the Centre of Indian Trade Unions (CITU) in the CBT, A K Padmanabhan, attended the meeting on its behalf. DEMAND WAS LONG OVERDUE A raise in the minimum pension, along with certain amendments to the scheme, has been a long pending demand of the trade unions. The issue of a minimum pension of Rs 1,000 was one of the ten points on which the trade union movement has been agitating and had conducted countrywide strikes. The EPS pensioners’ organisations too have been conducting struggles. This long pending issue was studied by an expert committee in 2010, and it was discussed by the CBT. In the year 2012, the issue was referred to the cabinet and was pending there for the last two years. The history of struggle against the EPS 1995 dates back to its very origin. The working people in the country, especially those who did not have any kind of pension scheme, have been demanding pension as a third benefit in addition to gratuity and provident fund. Instead of finding a solution to it, however, the government hit upon the idea of an employees pension scheme which was compulsorily implemented. After studying the scheme in depth, the CITU pointed out many lacunae and demanded its overhaul so as to ensure benefits to workers. But the government put forth many spurious arguments, and even the Supreme Court accepted those arguments which were meant to ‘prove’ that the scheme was beneficial to workers. The CITU conducted a countrywide one day strike on this issue. As years passed away, the points raised by the unions against the scheme were found to be genuine. The paltry amounts of ‘pension’ roused anger among workers. Even now, 2.92 lakh pensioners are getting less than Rs 250 per month. Actually the amount now being received varies from only Rs 2 upwards. More than 27 lakhs of pensioners are getting less than Rs 1,000 a month. In between, in the year 2008, certain important benefits like commutation of one third of pension for 100 months as lump sum and also the clause on ‘return of capital’ were unilaterally withdrawn. These two benefits were the main points which convinced the Supreme Court against the compulsory pension scheme. MINISTRY’S PROPOSALS The latest amendments on minimum pension and the increase in ceiling were approved by the finance ministry on January 21, 2014. According to the ministry’s note circulated in the CBT, the aforesaid proposals for amendments are interlinked and are part of a comprehensive proposal. Here is a gist of what was discussed in the CBT. 1) It was informed that the proposal for ensured minimum pension is only for a year (2014-15) and will be implemented from April 1, 2014. To cover the increase, a budgetary allocation of Rs 1,217.03 crore will be made. Trade union representatives in CBT protested against the ‘one year only’ proposal. Even the labour department felt that the scheme could not be amended for a year only. It also pointed out that “once modifications are introduced it would not be possible to roll them back.” Finally the labour minister, Oscar Fernandez, agreed to ensure that the increase in pension is not curtailed after one year. Many of the finance ministry’s other proposals were such that the workers’ interests would get affected. The CITU and other trade unions emphatically stated that existing benefits should not be curtailed or reduced. 2) The calculation of pensionable salary is now the average of the last 12 months’ wages. The proposal was to change it to the average of the last 60 months’ wages. This will surely reduce the pensionable salary and also the pension amount. 3) The government of India contributes 1.16 percent of the wages towards the EPS. As the wage ceiling is being increased, the government wants to limit its contribution. There are suggestions that those who are above the wage ceiling and voluntarily contribute to the EPF must not be given this 1.16 percent and that they must be asked to pay it from their wages. Another suggestion is to limit the 1.16 percent amount to Rs 15,000 even for those who are members of EPS from a lower wage level. The trade unions wanted all the existing practices in regard to the ceiling of Rs 6,500 to continue when it is raised to 15,000. 4) At present the members who have not rendered eligible service for pension at the time of their exit are entitled to a lump sum withdrawal benefit. The finance ministry wanted a deletion of the option for withdrawal. The workers’ representatives protested and even the labour minister said it “would not be justifiable, given the fact that the government at present cannot guarantee continuity of service or alternative job/work for any member who loses his employment.” 5) Another suggestion was to increase the age limit for pension to 60 from 58. Trade union representatives made it clear that this could not be accepted unless the age of superannuation of workers is increased to 60; in many industrial establishments this is 58. 6) Another proposal is to increase the reduction rate, which is four percent per year, to six percent. This rate was earlier six percent, but was reduced to three percent and then increased to four percent in 2008. Reduction rate is applicable when pensioners get “early pension.” This will also lead to reduction of the existing benefits. 7) The finance ministry wanted to change the existing investment pattern of EPS corpus. Trade unions had earlier rejected the proposal to investment funds in share market. Once again this was rejected by trade union representatives and it was insisted that investment guidelines should be decided by the CBT only. 8) The proposal for fixation of pension after changes in the ceiling is that pro-rate pension will be calculated from April 1, 2014, instead of calculating the total pension on the basis of wages at the time of retirement. 9) There was a proposal to add a proviso that the “central government may make such rules as it may deem necessary for increasing, decreasing, continuing or discontinuing such subsidy or part thereof in respect of all or any category of family pensioners.” The CITU vehemently objected to it, saying a unilateral decision by the government would only negate the existing benefits. The labour minister was out to justify the proposal. As for commutation, the CITU representative took up the issue of continued exploitation of those pensioners who are getting commuted pension even after a period of 100 months, for which they had commuted their pension. The CITU has been demanding restoration of the original pension after the amount is recovered. EMPLOYERS’ DEMAND The employers’ representatives in the CBT meeting said they were against increasing the wage ceiling to Rs 15,000 at one stretch. They wanted it to be raised only to Rs 10,000 now and to 15,000 at a later stage. They also said small and medium enterprises would be affected due to increased expenses. All these points were sufficiently refuted by trade union representatives. Though the idea of a minimum pension was accepted by the government, what it finally does with other proposals will be known only when it finalises the notification. Trade unions are prepared to see that no existing benefit is axed. They are determined to fight for their long pending demands --- an increase in pension to all pensioners, linking the pension to the cost of living index, restoration of the commutation of pension, and the return of capital benefits.