In good news for over 6 lakh pensioners of Employees Pension Scheme (EPS), the government earlier this month notified a change in the EPS, 1995 scheme, implementing retirement fund body Employees' Provident Fund Organisation's (EPFO) decision
to restore pension commutation under the scheme.
to restore pension commutation under the scheme.
On February 20, the labour ministry notified the decision of the EPFO to restore pension of those who opted for commutation of their pension on or before September 25, 2008. Pension commutation refers to partial withdrawal of pension fund in advance by a subscriber. Following commutation, a member gets reduced pension amount for 15 years. However, with the govt's latest decision, such pensioners would receive full pension after completion of 15 years of commutation. From September 2008, commutation of pension was not allowed.
As per earlier rules, an EPS member could commute up to one-third of the monthly pension and receive 100 times of the amount as lumpsum. In such a case, he used to get reduced monthly pension for the rest of life. But after the recent decision, a member's pension will be restored to the full value after 15 years if he had opted for commutation of pension.
For example, if a member had commuted for pension in January 2008, he or she will get his original pension from January 2023.
"The normal pension in respect of those members who availed the benefit of commutation of pension under the erstwhile paragraph 12A of this scheme, on or before the 25th day of September, 2008, shall be restored after completion of fifteen years from the date of such commutation," the labour ministry's notification reads.
Worth mentioning here is that in August 2019, the EPFO's apex decision-making body -- Central Board of Trustees headed by the labour minister -- approved the proposal to restore commutation of pension for 6.3 lakh pensioners who had opted for the benefit.
