EPFO Recipients to get an option of withdrawing pension after the age of 60 years!
The Employees’ Provident Fund Organisation (EPFO) is most likely to commence giving its recipients a decision to start withdrawing pension out from their account once they turn the age of 60, as compared to the 58-year maturity currently.
The proposal for increasing the superannuation age was carried out by looking at various aspects. This proposal is expected to help the pension recipient grow his/her pension kitty. Additionally, this would also aid the pension fund in reducing its deficit.
As per the reports by some of the major media houses, the EPFO is also likely to offer incentives. The incentives being offered will include incentives such as an added bonus to the members who agree to draw their pension after they turn 60.
According to a senior government official, this proposal of increasing the superannuation age for drawing pension would be presented to the EPFO’s Central Board of Trustees for approval. Post this approval, the proposal is expected to be sent for Cabinet’s approval by the labour ministry.
According to EPFO, the pensionable age for members should be raised in accordance with the current, as the increase in age increases the benefits to members for two additional years of service and helps to grow their pension kitty. Additionally, the proposal is considered very beneficial as it will also help the government in cutting the pension fund’s deficit by approximately Rs.30,000 crore.
As per the retirement fund manager, “The Age of superannuation, which is 58 years currently, needs to be increased to the age of 60. This is because most of the pension funds all over the world give away pension post 65 years.” The retirement fund manager said this in the amendments that were proposed to the EPF Act, 1952.
According to the Employees’ Pension Scheme, 1995, an employer contributes around 8.33% of an employee’s salary to pension, along with a ceiling on pensionable salary at Rs 15,000.
This proposal is also said to align EPFO to the government pension scheme and the National Pension System, that have set the age of 60 years as their superannuation age. As per a senior government official, this proposal will be presented to the EPFO’s Central Board of Trustees at the next meeting, which is expected to be held in November. Mr Vrijesh Upadhyay, General Secretary of the Bharatiya Mazdoor Sangh says that “They are in support of the proposal. Also, this proposal should have been brought forward long back as this proposal will benefit the pension recipients with a significant increase in their pensionable amount by extending the tenure for two years”. Thus, a welcoming and positive reaction is seen from people regarding this proposal of withdrawing pension at the age of 60 years instead of the current age of 58 years