MINIMUM PENSION Rs.1000/- UNDER EPS-95

Government today approved the proposal to ensure Rs 1,000 minimum monthly pension under a scheme of retirement fund body EPFO that would immediately benefit 28 lakh pensioners. The decision to provide the entitlement under Employees' Pension Scheme-95, run by the Employees' Provident Fund Organisation, was taken by the Union Cabinet in its meeting held here. The move will immediately benefit about 28 lakh pensioners including five lakh widows. There are 44 lakh pensioners. Earlier this month the EPFO trustees had approved the proposal. The Central Board of Trustees (CBT), the apex decision making body of EPFO had met on February 5, and decided to amend the EPS-95 scheme for the purpose. The proposal was placed before the Union Cabinet for approval as the government had made funding provisions for it. The government would have to provide an additional amount of around Rs 1,217 crore to ensure the minimum pension of Rs 1,000 starting 2014-15. Pensioners will get the benefit with effect from April 1. The proposal has already been approved by the Finance Ministry. 

EPFO CAN BE STOCK EXCHANGE MEMBER

The Finance Minister has allowed retirement fund body EPFO to become a member of a stock exchange although its trustees oppose parking even a part of its over Rs 5 lakh crore corpus in equities. The Department of Economic Affairs has issued a notification under the Securities Contracts (Regulation) Rules Act 1957, permitting the Employees' Provident Fund Organisation (EPFO) to become a member of a recognised stock exchange, according to a release. Market regulator Sebi had suggested that the government facilitate the flow of EPFO funds to equity-linked mutual funds to boost the market. The main recognised exchanges in the country are the National Stock Exchange of India and the BSE. The Finance Ministry has been pitching for EPFO funds to be invested in the equity markets to maximise their yields. However, following strong opposition from unions in view of the volatile nature of stocks, the EPFO did not opt for equity investment. The Finance Ministry had allowed the EPFO to invest up to 5 per cent of its funds in equity in 2005 and enhanced the limit to 15 per cent in 2008. A recent notification by the Labour Ministry allows the EPFO to invest up to 5 per cent of its funds in money market instruments, including units of mutual funds and equity-linked schemes regulated by the Securities and Exchange Board of India. The EPFO has more than 5 crore subscribers across the country. It provided interest of 8.5 per cent on PF deposits in 2012-13. The EPFO trustees have decided to pay interest of 8.75 per cent in this financial year.

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