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EPS - NPS merger would need amendment of law




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08 Aug, 2013 11:15a.m.

Any move to merge the Employees Pension Scheme with the New Pension Scheme would require amendment of the Employees Provident Fund Act, which may not happen at least before the elections, according to trade unions and employers organisation.

Commenting on Finance Minister P Chidambaram's letter to former Labour Minister Mallikarjun Kharge reported by this paper urging merger of the two schemes, trade unions said any bid to impose NPS on EPS subscribers would first require amendment and that would not be a popular move in an election year.

Both the EPF Act and the EPS make mention of pension scheme and an amendment would have to be made to replace EPS to NPS in the Act, says DL Sachdev All India Trade Union Congress State Secretary and member of the Central Board of Trustees.

He does not see any reason why employers organisations would support the New Pension Scheme as their contribution to EPFO would continue as before.

The employee and employer make 12% contribution each and 8.33% of this goes into pension along with a 1.66% contribution from the Government. So in either case, the employer has to contribute, says Sachdev.


It is an election year, and the Government is unlikely to take such an unpopular step now, he said.

We will oppose any merger. They cant shut down EPS without taking all of us into confidence. said AD Nagpal state secretary of the Hind Mazdoor Sabha and member of the Central Board of Trustees of the EPFO:

Bhartiya Mazdoor Sangh general secretary Baij Nath Rai said that the Central Board of Trustees has not been called for nearly six months and this could be an indication of the Government's intentions regarding EPS. 'But we wont accept merger with NPS. Pension funds are not meant for gambling. These are hard earned savings of workers and cant be gambled away in shares,' he said, referring to the equity investments that NPS does.


Read full article @ http://www.business-standard.com/article/economy-policy/eps-merger-with-nps-would-need-amendment-of-law-say-unions-113080701090_1.html


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