The government panel recommends a Universal Pension Scheme for gig workers and the self-employed. The panel has also raised concerns regarding the sustainability of the Employees’ Pension Scheme, 1995, under the Employees’ Provident Fund Organisation.
The Ad-hoc committee headed by labour secretary Sunil Barthwal recommends a minimum pension worth Rs 3,000. The panel anticipates that a pension pool worth Rs 5.4 lakh should be sufficient for the payout. This could be possible if EPS-95 is revamped or a new scheme has to be introduced.
This new scheme could be in consideration given the clarion call of the Prime Minister on global trends and universal social security. This scheme aims to cater to individuals who are not covered under EPS-95, including gig workers and self-employed.
The ad-hoc committee also mentioned that the sustainability of EPS-95 was a reason for concern and backed the need to look at different investment patterns. The EPS design renders little flexibility; however, an increase in the minimum service period from 10 to 15 years could enhance benefits by up to 33%.
The committee opines that India needs to follow the global trend according to which most countries have drifted to defined contributions for a pension from defined benefit plans. A defined contribution pension scheme will facilitate individual accounting, and the amounts will be proportionate to savings.
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