EPF PENSION SCHEME AND RELATED CONCERNS

EPFO Logo

The representatives of the Joint Action Committee of All Central Trade Unions and Independent Federations of Tamil Nadu submitted a memorandum to express serious concerns regarding the functioning of the Employees' Provident Fund Organisation (EPFO) and the current status of pension disbursal under the EPS-95 scheme.

When the Employees' Provident Fund Act, 1952 was enacted, it was heralded as a landmark social security measure for the working class. Contributions from both employees and employers were pooled, invested, and returned with interest – a reassuring promise of social security after retirement.

In 1971, the Family Pension Scheme was introduced with contributions from the employee, employer, and government at a ratio of 11/6:1 1/6: 1 1/6 respectively. This scheme was designed to support the families of deceased employees by providing a family pension.

Later, the Employees' Pension Scheme (EPS) 1995 was implemented with the noble objective of providing monthly pensions to retired employees. Under this scheme, 
8.33% of the employer's contribution and 1.16% from the Government were earmarked for pension. The pension was calculated using a formula based on the last drawn salary divided by a factor of 70.

However, the actual pension disbursed to most retirees remains paltry and inadequate, failing to meet the rising cost of living. While the UPA Government declared a minimum pension of Rs.1000/- in 2010, that too for the retirees superannuated at the age of 58 years who did not avail the facilities of commutation or return of the capital  this amount is grossly insufficient today. The working class has been persistently demanding that the minimum monthly pension be raised to Rs.9000/, a just and necessary measure in line with inflation and basic living standards. Unfortunately, this genuine demand has been repeatedly denied under the pretext of the Government's financial constraints.

We place the following demands and clarifications for immediate attention:

  1. Clarification on the 1971 Family Pension Fund corpus – What was the quantum of the fund when it was merged with EPS-95, and how has it been utilized since then?
  2. Disclosure of capital data of deceased pensioners – How many pensioners have died since 1995, what was their accumulated capital, and what has been done with this fund?
  3. Unaccounted funds from multiple PF accounts – Prior to 2014, many migrating workers had multiple inactive accounts due to lack of portability. These unaccounted amounts must be transparently calculated and merged appropriately.
  4. Lack of transparency in interest calculations – Employees are unable to verify whether interest on their provident fund accounts is being calculated and credited properly. A transparent mechanism must be established.
  5. Judicial delays and denial of justice – Thousands of pensioners are forced to knock on the doors of the judiciary to claim their rightful dues. A glaring example is the case of retirees of Neyveli Lignite Corporation and many other organizations who have been waiting for years without justice.
  6. Higher Pension Application – Lack of Clarity – The EPFO invited applications from employees willing to contribute more towards higher pension. However, even after receiving applications, the formula for higher pension has not been disclosed, leaving applicants in the dark.
  7. Inadequate and indifferent approach of EPFO officials – It is disheartening to note that many pensioners are subjected to apathy, lack of response, and miscommunication when seeking clarifications from EPFO offices.

We strongly urge the EPFO to:

  • Declare the financial status and utilisation of the pension and provident fund corpus.
  • Enhance the minimum pension to Rs.9000/- with DA linkage.
  • Ensure full transparency in fund management, account transfers, and interest calculation.
  • Provide time-bound redressal mechanisms to pension-related grievances.
  • Reveal the formula and structure for the proposed higher pension scheme.

The memorandum was submitted as part of a state-wide demonstration organized on 08.04.2025 by the Joint Action Committee to condemn the indifferent and exploitative approach of the EPFO towards pensioners and working-class contributors.