The body of retirement fund EPFO is considering proposing the rise of the age limit to 60 years from the current 58 years for vesting of pension, under the Employee Pension Scheme (EPS-95).
In the current scenario, a government or public sector employee covered under the plan can contribute up to the age limit of 58 years and claim the pension after that.
The Pension Implementation Committee (PIC) has proposed that the period of vesting should be raised to 60 years. It has also suggested developing a model to provide an incentive for the members who will remain vested for 60 years and withdraw savings after that.
The Provident fund organization listed the agenda of raising age limit at one of its meetings. The central board of trustees suggested that raising the age limit would result in reducing the deficit in the pension fund and the members would have two additional years for reaping monetary benefits.
According to valuer appointed by EPOF, the net liability of the deficit is Rs.10, 855 crores as on March 31, 2012, Rs.6,712 crore on March 31, 2013 and Rs.7832.74 crores as on March 31, 2014. The total projected deficit target of Rs.27, 067 crore can be reduced significantly by increasing the age limit to 60 years.
The committee has also proposed to increase the Short Service Pension (SSP) entitlement age from 50 years to 55 years. This will reduce the deficit in the pension fund to Rs.12-28 crores.
In current state of affairs, the EPFO members can ask for fixing pension at attaining 50 years of age, if they have served in job for the last ten years.
There was one more proposal from the committee, the current system of determining the pensionable salary based on the average of 60 month's period should be reduced to 36 months’ period.
There is no bar for contributing to other social security schemes, including the Employees Provident Fund Organization (EPOF), Employees Provident Fund Scheme (EPFS) 1052, and Employees Deposit Linked Insurance Scheme (EDLIS) 1976.
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