NEW DELHI : In continued highhandedness, Centre is now looking to destroy the social security enjoyed by the working people by removing the safety feature inherent in Employees’ Provident Fund(EPF). The move has however been now put on hold, after several trade unions, with CITU and INTUC on the forefront, offered stiff resistance to the anti-employee strategy and the topic matter will now be tabled for discussions at the next Board meeting.
In the Central Board’s online meeting held Wednesday, the trade unions opposed Centre’s proposition for change over to a new scheme, in what it claimed would be higher pensions for higher share of contributions.
Currently, the pension funds pertaining to all employees are treated as one account from which, pensions are distributed each month to pensioners across the sectors. The Pension Fund draws on government contribution of up to 12 percent on employees’ salaries, the maximum of which is Rs 15,000 for contribution purpose. An equivalent sum is deducted from the employee’s salary as well. The employee’s contribution earns 8.33 percent in interest which is also added to his share in the PF account. The Centre claims, the new scheme seeks to redress a wide grievance that pensions from the existing PF scheme is less and offers opportunity to contribute a greater share and earn more. The argument sounds good but fails to mention the larger risk involved.
The Centre’s move, if allowed, will essentially destroy the EPF’s social security feature by leveling it with the National Pension Scheme(NPS), CITU delegate AK Padmanaban pointed out at the meeting. NPS is a pension scheme where any individual between ages 18-65, including expats, can contribute Rs 500 upward on monthly basis and all the monies thereof, is deployed into share trading. When one reaches the age of 65, pension is paid based on the value of funds in stock investment at that time. This means huge risk and uncertainty to gambling levels, the reason why trade unions oppose the move vehemently.
Further discussions on the matter will be held in December, the Union Minister for Labour informed. The trade unions demanded that the next meeting be held in-person instead of an online one.
The proposed gamble
Instead of treating the aggregate pension funds as one account, the Centre plans to allocate individual account status to each employee and open doors to engaging their contributions in the stock market. This move met trade union resistance when broached by Modi government in its first term. The current proposition is its yet another attempt to present the proposal amid pandemic crisis. Incidentally, the money from NPS deployed in stock market by the Centre has resulted in a colossal loss of Rs 1.03 lakh crore.
