Benefit for EPF Pensioners who opted for commutation
Employee Provident Fund Organization( EPFO ) is an organization that administers Employee Provident Fund ( EPF ) and Employees' Pension Scheme ( EPS ).
As per EPS rules, an EPFO member who retired before 26 th Sep, 2008 could get maximum One-third of his/her pension as Lump-sum i. e, Commuted pension and remaining Two-third was paid as montly pension to an employee for his/her life time. As per current rules of EPF, an EPFO member does not have an option to receive the commutation benefit.
The Ministry of Labour and Employment, in a notification dated 20 th Feb, 2020 has notified the restoration for pensioners under EPF scheme who have commuted part of their pension at the time of retirement. The move is expected to result in substantial increase in pension for those EPF pensioners who retired before 26 th Sep, 2008 and had opted for partial commutation of pension. The Government says, around 6.3 lakh pensioners will be benefited. The higher/full pension benefit will be restored after 15 years from the date of receiving commuted pension at the time of retirement.
The new notification dated 20 th Feb, 2020 will benefit such employees as it would lead to restoration of full ( higher ) pension after 15 years. Therefore an individual who retired on 1 st Apr, 2005 would be eligible to receive the benefit of full pension after 15 years i. e, from 1 st Apr, 2020.
The proposal to restore the full monthly pension was approved by the EPFO in its Central Board of Trustees (CBT) meeting held on 21 st Aug, 2019.
As per EPS rules, an EPFO member who retired before 26 th Sep, 2008 could get maximum One-third of his/her pension as Lump-sum i. e, Commuted pension and remaining Two-third was paid as montly pension to an employee for his/her life time. As per current rules of EPF, an EPFO member does not have an option to receive the commutation benefit.
The Ministry of Labour and Employment, in a notification dated 20 th Feb, 2020 has notified the restoration for pensioners under EPF scheme who have commuted part of their pension at the time of retirement. The move is expected to result in substantial increase in pension for those EPF pensioners who retired before 26 th Sep, 2008 and had opted for partial commutation of pension. The Government says, around 6.3 lakh pensioners will be benefited. The higher/full pension benefit will be restored after 15 years from the date of receiving commuted pension at the time of retirement.
The new notification dated 20 th Feb, 2020 will benefit such employees as it would lead to restoration of full ( higher ) pension after 15 years. Therefore an individual who retired on 1 st Apr, 2005 would be eligible to receive the benefit of full pension after 15 years i. e, from 1 st Apr, 2020.
The proposal to restore the full monthly pension was approved by the EPFO in its Central Board of Trustees (CBT) meeting held on 21 st Aug, 2019.
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