Govt Decition to Stop EPF commutation

CITU Protest Unilateral Cut in Pension Benifits

31st October 2008

Dear Shri Fernandes,

I am forwarding herewith the copy of the letter dated 31st October 2008 addressed to you by W R Varada Rajan, Secretary and CITU’s nominee in the Central Board of Trustee (CBT) of EPFO protesting unilateral decision of the Govt making adverse changes in the Employees Pension Scheme without consulting the CBT as notified by EPFO Circular letter dated 16th October 2008 and Gazette notifications GSR nos 688(E) to 690(E) dated 26th September 2008.

The Employees Pension Scheme meant for providing pension to the workers has been altered to the advantage of the employers and the Govt to perpetrate a sharp reduction in the pension benefits of the workers and simultaneously to provide relief to the defaulting employers; and such novel exercise has been done unilaterally ignoring the tripartite Central Board of Trustee and the workers’ representatives in particular. There was no decision in the CBT on any of these changes nor any of these issues was ever brought before the CBT for a structured discussion. This is totally deplorable.

The unilateral changes in the Employees Pension Scheme pertain to downward revision in the rates of damages to be levied on the defaulting employers to their advantage on the one hand and drastic reduction of pension-related benefit of the workers on the other in respect of 1) early pension (below 58 years), 2) withdrawal of commutation facility and 3) withdrawal of the option for availing combination of reduced pension and return of capital. In essence, all the beneficial options for the workers were withdrawn besides reducing the pension amount for the early-pensioners and the defaulting employers are rewarded with relief for the default and finally the hard-earned savings of the workers in pension fund is going to foot the bill for such anti-worker retrograde exercises.

The brazenly pro-employer bias of the Government is also noted from the fact that while the Govt is in haste to alter the Employees Pension Scheme in order to reward the defaulting employers and curtail the pension benefit of the workers completely ignoring the tripartite CBT, the unanimous recommendation of CBT for reducing the threshold limit for coverage of EPF &MP Act 1952 from the existing limit of establishment employing 20 workers to establishment employing 10 workers is gathering dust with the Govt sitting tight on the unanimous recommendation of the tripartite forum thereby reducing tripartism to mockery.

CITU opposes such a pro-employer bias of the Govt and urges upon the Govt to rescind all the three unilateral and anti-worker changes made in the Employees Pension Scheme revoking the concerned Gazette notifications. There should not be any unilateral alteration in the Employees Pension Scheme without ensuring a consensus with the Central Trade Unions and the tripartite forum, With regards,

Yours sincerely,

(M K Pandhe)
President