Hidden agenda behind implementation of EPS,’95”

From the pen of G Srinivas Rao.

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“Hidden agenda behind implementation of EPS,’95”

As per the article written by Sri V. Krishna Ananth, the then Correspondent of “The Hindu” on Page 8 “Nation” of 3rd December, 1995, i.e., 29 years back (03-12-1995 to 16-11-2024), which he concluded with the following para:

“The future in instalements”

“Contrary to the claims of Labour Ministry that this is one of the “Welfare Schemes” launched by the Rao (Sri P.V. Narasimha Rao) dispensation, the fact is that the proposals are nothing but a scheme by the government “to take away the contributions of “employers” in the “private sector” and manage them in its own way” and give the workers a “paltry return” in the name of pension.”

Courtesy: Sri Parveen Kohliji

Private Sector employees are not eligible for Higher Pension. The constitute more than 90% of the contributors under EPS,’95. As per the estimated 7 crore regular contributors as on 31-03-2024, only 10,00,000 are eligible for higher pension who are mostly from public sector undertakins and also from some generous private organisations after excluding from around 17 lakh who applied on line i.e., those attained 58 years on or before 31-08-2014, where employers unable to submit wage particulars due to closure of the establishment or non-traceability of records, those who died after applying but before receiving Demand Notice, those who are going back from payment as per Demand Notice etc. I.e., 1.42%.

True to the conclusions in the above article, every rupee and paise (contributions under the ceiling of 1,000/- and 1,600/- under EFPS,’71 used to the rounded-off to nearest 25 paise) from 01-03-1971 (the date of implementation of EFPS,’71) till 31-03-2023 lying with the Government as investments by EPFO i.e., for the past 53 years, 8 months despite,
a) Pensioners along with nominees died, b) more than 14 crore employees received withdrawal benefit becuase they are not eligible for pension.

EPFO is saying that EPS,’95 is formulated on the principles of insurance, i.e.,
a) if employees dies in service, his nominee along with two children receive family pension. (here employees who die while in service are to be divided into two categories i.e,, a) who died without contributions enoug to earn a pension for himself, b) who died contributing enough to earn a pension for himself i.e., who die from 45 to 57 years as example. b) apply minimum pension rule from the corpus of EPS,’95.
Despite observation of the insurance principles, the expenditure so far incurred i.e., upto 31-03-2023 is around 50% of the interest earned towards payment of pension and withdrawal benefits and the remaining 50% reserved for future payments. Leave alone the contributions of employees and government which are still lying with the government till date.

Thus EPS,’95 is a scheme, the hidden agenda as per the above article and also as per the experience gained since the last 29 years, is that

“EPS,’95 designed on the principles of insurance, the expenditure of which both present and future can be met only from interest income leaving the contributions “forever” with the government.

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