EPFO restores the withdrawal of the fund into parts for pensioners; 6.3 lakh hopes to benefit
The pension commutation refers to the partial withdrawal of the fund in advance by a subscriber, who then receives a reduced pension amount for 15 years.
With the last decision of the ministry, these pensioners would receive their full pension after completing 15 years.
On February 20, the ministry notified the decision of the Employee Pension Fund Organization (EPFO) to reinstate the pension of those who opted to switch their pension on September 25, 2008 or earlier.
In this regard, the Employee Pension Plan, managed by EPFO, has been modified.
“The normal pension with respect to those members who took advantage of the pension commutation benefit under the old paragraph 12A of this plan, on or before September 25, 2008, will be restored after the end of fifteen years from of the date of such switching “, according to the notification.
Up to 6.3 lakh pensioners would benefit from the decision. They had opted for switching their pension and obtained a lump sum at the time of retirement from their pension fund on September 25, 2008 or earlier.
The provision for pension switching was withdrawn by EPFO. Now, the installation has been restored for all those who opted for it on September 25, 2008 or before.
According to the commutation, the monthly pension used to be reduced by one third during the next 15 years and the reduced amount was given in a lump sum. After 15 years, pensioners were entitled to obtain the full pension.
In August 2019, the highest decision-making body of EPFO, the Central Board of Trustees headed by the labor minister, approved the proposal to restore the commutation of the pension for pensioners of 6.3 lakh who had opted for the benefit.
An EPFO panel had recommended the modification in EPS-95 (Employee Pension Scheme, 1995) to restore the commuted pension value to pensioners after 15 years of turnaround.
Previously, under EPS-95, members were allowed to commute a third of their pension for 10 years, which was restored after 15 years. This facility is still available for certain categories of government employees.