People's Democracy

Govt must Enhance Its Contribution to EPF Corpus

ON August 2, CPI(M) MP and CITU general secretary Tapan Sen wrote a letter to Mallikarjun Kharge, the union minister of labour & employment, regarding the employees pension scheme 1995. It is to be noted that Kharge is also chairman of the CBT (EPFO) (Central Board of Trustees, Employees’ Provident Fund Organisation).

Sen’s letter drew the minister’s attention to the following recommendation of the Standing Committee and the government’s reply which was interim in nature:

Para 76 of the committee’s recommendations runs as below:

The committee note that EPS 1995 is a contributory scheme wherein the employers’ contribution towards the pension of the employee is diverted @ 8.33% from the total contribution of 12% made towards social security obligations. Under the EPS, no contribution is taken from the member, i.e., the employee for the pension scheme. The government contributes @ 1.16% to the pension fund. Admittedly, neither of the above rates of contributions has been revised for the last 14 years. On being asked about the reasons for non-revision of contribution by the government, it has been stated that generally the government contribution is increasing. It has further been staged that presently there is no proposal to enhance the contribution of the government. The non-revision in the rates of contributions even after one and a half decade, speaks volumes about the callous attitude of the government towards the workforce. More so, when this segment of the workforce has contributed enormously in the economy of the country leading to increase in leaps and bounds in the revenue collection of the government. The committee, therefore, strongly recommend that the formula regarding rate of contribution should be revised at periodic intervals wherein the rate of contribution from the government should at least be fixed at half of the rate of contribution which is being made by the employer or the employee towards the pension scheme.”

The government’s reply to the above recommendation said the following:

“At present, an Expert Committee under the chairmanship of Special Secretary (Labour and Employment) consisting of actuaries, expert of finance and representatives of all stakeholders is reviewing the Employees’ Pension Scheme 1995 as a whole and any decision / action regarding enhancement of government’s contribution will be considered after the receipt of the recommendations of this Expert Committee.”

This, according to Sen, means the Expert Committee which was constituted on June 12, 2009, did not take into cognisance the recommendation of the parliamentary committee at all in its report. But the Expert Committee report, now under the consideration of CBT, cannot in any way overrule the recommendation of a parliamentary committee. It is only for the government to accept or reject the standing committee’s recommendation on enhancement of government’s contribution. Se said that as a veteran parliamentarian, the labour minister would agree that recommendation of a parliamentary committee cannot be ignored in what appears to be a very cavalier manner.

Sen therefore urged Kharage that both as the labour minister and as the chairman of the CBT, he must accept the recommendation of the standing committee and take up the case forcefully with the government. He also expressed the sincere hope that the unanimous recommendations of the parliamentary standing committee, backed up by all the central trade union organisations, the CBT (EPF)) and the labour ministry, would have a formidable influence upon the government agreeing to an enhancement of its contribution in the interest of the working class of the country.