Panel suggests pension cap for coal workers at Rs 45,000/Month

KOLKATA- A panel set up by the Coal Mines Provident Fund Organisation has recommended that the monthly pension for retired workers be capped at ₹45,000 because the poorly managed fund is running out of money.The minimum pension should be raised to ₹1,000, according to a copy of the panel’s recommendations available with ET.The CMPFO is meant for coal workers and it operates in the same manner as the Employees Provident Fund Organisation. Members contribute a monthly amount that the employer matches. The bulk of this fund, along with interest and bonus, is returned to employees on retirement while a portion is set aside to provide a steady monthly pension.The CMPFO’s fund size is a shade over ₹2,000 crore and it disburses ₹180 crore every month as pension for some 5 lakh former Coal India employees. According to a recent actuarial study, the fund is expected to go completely dry by 2023.Looking at the shortfall, the board of trustees of CMPFO formed a panel to suggest changes to make the pension scheme sustainable.The members of the committee include director personnel of Coal India, director personnel of South Eastern Coalfields and representatives of the Centre of Indian Trade Unions and the Bharatiya Mazdoor Sangh.“We have recommended that the maximum pension be capped at ₹45,000 per month or the highest pension given to any beneficiary in the month preceding the date of notification of the recommendation,” said DD Ramanandan, general secretary of All India Coal Workers Federation, which is affiliated to CITU. “If it is notified now, the highest pension would be around ₹45,000 per month. However, if it is done after a year, the highest pension is likely to be ₹60,000 per month.” The committee said the average salary for 30 months should be used to calculate pensionable salary instead of the 10-month average being considered now.

from Economic Times https://ift.tt/2PS3X8v