Hindi English Translation || Editorial || The pension conundrum: On the EPFO resource base

The pension conundrum: On the EPFO resource base

A higher pension may quickly deplete (समाप्त करना, कम करना) the EPFO resource base

Union Minister for Labour and Employment Bhupender Yadav seems to have little to say on the issue of the Employees’ Provident Fund Organisation (EPFO) allowing sections of subscribers and pensioners to opt for higher pension under the Employees’ Pension Scheme (EPS), 1995. With the four-month period fixed by the Supreme Court in November last year set to lapse (A slight error is typically due to a lack of attention) soon for those who were in service as on September 1, 2014 to exercise the option, his observation that the Court’s directions, which have “legal, financial, actuarial and logistical implications (निहितार्थ, अनुमान)”, are under examination, has not been reassuring (आश्वासन देना, यक़ीन दिलाना). The issue of allowing higher pension — pension proposed in the event of employers making 12% mandatory PF contributions on employees’ actual pay that exceeds the statutory (वैधानिक) ceiling — has been bothering the PF establishment almost from the start. Adopting actuarial (Relating to the calculation of life expectancy based on some statistical data and calculation of premium rates, risks, and probabilities based on statistics) principles for ensuring long-term financial viability, the Pension Scheme is funded by the transfer of 8.33 percentage points out of the 12% PF contributions by employers coupled with the central government’s contribution of 1.16% of the monthly wages that do not go beyond ₹15,000. Opposition to the higher pension is around the projected actuarial deficit (घाटा, अभाव) in the valuation of PF, lower returns on investments and increasing pensioner longevity (लम्बी आयु, दीर्घायु). The EPFO top brass feels that higher pension may deplete the resource base in no time. The PF establishment has every reason to feel concerned (चिंतित होना, लगाव रखना) but what has not helped its case is the proviso — paragraph 11 (3) of the pre-amended rules of the EPS — allowing for such requests to be entertained.

Even in September 2014, when the proviso was removed and amendments made to the EPS’s rules, the concept of higher pension was not abolished (To end the effect of something). Instead, the amendments provided 12 months for employees and employers to exercise the joint option. This is why sections of pensioners are justified in their demand for higher pension, as their employers had, during their service period, made contributions on their actual pay which had exceeded the statutory ceiling (An upper usually prescribed limit). But, the authorities, while providing an online option for pre-2014 retirees to exercise the option, have sought to mirror the conditions in Himachal Pradesh Tourism Development Corporation (a battle for higher pension that began over 15 years ago). Such an approach goes against the spirit of the Court’s 2022 judgment, which was based on the 2016 verdict of the Court, as the two judgments are for eligible pensioners to reap (To cut a crop with a reaping machine) the benefit. What has added injury to insult is the EPFO’s circular (January) re-opening the cases of higher pension after 2016, and initiating recovery proceedings. The government and the EPFO must explain to the stakeholders (हिस्सेदार, हितधारक) the genuine difficulties in implementing the Court’s directions. Bureaucratic (नौकरशाही) shortsightedness (अदूरदर्शिता) and compliance difficulties around simplistic (Oversimplified or simple) legal directives have raised hopes as well as triggered (To Cause to happen) anxieties (चिंता) among pensioners and those nearing retirement.

Courtesy: The Hindu

Important Word List With Meaning

1.Conundrum (Noun)

Hindi Meaning - पहेली
English Meaning - A riddle or puzzle.

2.Deplete (Noun)

Hindi Meaning - समाप्त करना, कम करना
English Meaning - To decrease the stock or supply of something.

3.Implication (Noun)

Hindi Meaning - निहितार्थ, अनुमान
English Meaning - The conclusion that can be drawn from something although it is not explicitly stated.

4.Reassure (Verb)

Hindi Meaning - आश्वासन देना, यक़ीन दिलाना
English Meaning - To restore to confidence.

5.Statutory (Adjective)

Hindi Meaning - वैधानिक
English Meaning - Required, permitted, or enacted by statute.

6.Deficit (Noun)

Hindi Meaning - घाटा, अभाव
English Meaning - Shortage of something required

7.Longevity (Noun)

Hindi Meaning - लम्बी आयु, दीर्घायु
English Meaning - A long individual life.

8.Concern (Verb)

Hindi Meaning - चिंतित होना, लगाव रखना
English Meaning - To care about some matter of trouble.

9.Amend (Verb)

Hindi Meaning - संशोधन
English Meaning - Make minor changes in (a text) in order to make it fairer, more accurate, or more up-to-date.

10.Bureaucratic (Adjective)

Hindi Meaning - नौकरशाही
English Meaning - Relating to the characteristic of a bureaucrat or bureaucracy.

11.Stakeholder (Noun)

Hindi Meaning - हिस्सेदार, हितधारक
English Meaning - A person with an interest or concern in something, especially a business.

12.Anxiety (Noun)

Hindi Meaning - चिंता
English Meaning - Mentally distressing concern.

13.Shortsightedness (Noun)

Hindi Meaning - अदूरदर्शिता
English Meaning - The act of lacking in foresight.

14.Lapse (Noun)

English Meaning - A slight error is typically due to a lack of attention.

15.Actuarial (Adjective)

English Meaning - Relating to the calculation of life expectancy based on some statistical data and calculation of premium rates, risks, and probabilities based on statistics.

16.Abolished (Verb)

English Meaning - To end the effect of something.

17.Ceiling (Noun)

English Meaning - An upper usually prescribed limit.

18.Reap (Verb)

English Meaning - To cut a crop with a reaping machine.

19.Trigger (Verb)

English Meaning - To Cause to happen

20.Simplistic (Adjective)

English Meaning - Oversimplified or simple.