The central board of the Employee Provident Fund Organisation (EPFO) may, at its upcoming meeting on July 8, explore the possibility of framing an universal pension scheme for those not yet covered by the retirement fund. A separate scheme that would provide PF and pension benefits for gig and platform workers is likely to be taken up at the meeting to be held in Bengaluru, sources said.
The labour codes passed by the Parliament in 2020 had provided that government would come up with a social security scheme for gig workers.
An internal committee of the EPFO had made a case for introduction of an universal pension scheme given the Prime Minister Narendra Modi’s call to provide an universal social security catering to those not covered under the Employee Pension Scheme, 1995.
While there has been a demand for increasing the monthly pension payout under EPS 1995, the EPFO is currently finding it difficult to provide minimum pension of ₹3,000 per month given the low contribution to EPS by EPF.
Under EPF, an employee pays 12 per cent of his basic wage and some allowances as statutory deductions. A matching amount is contributed by the employer, out of which 8.33 per cent goes to EPS.
Higher pension coverage
A NITI Aayog report titled ‘India’s Booming Gig and Platform Economy’ released on Monday recommended that gig and platform firms need to adopt policies that offer old age/retirement plans and benefits and other insurance cover for contingencies such as injury arising from work that may lead to loss of employment and income. Such policies may be uniquely designed by a firm, in partnership with insurance companies, or could be designed and offered in collaboration with the government, as envisaged under Code of Social Security, 2020.
India has a huge unorganised or informal sector, around 83 per cent of the workers are in informal employment where there is no formal employer-employee relationship. It maybe recalled that pension regulator PFRDA had few years back mooted an auto enrolment scheme for increasing the pension coverage in India.
June 27, 2022