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Veena Venugopal

Mumbai , Jan. 11

ALL members of the Employees Provident Fund (EPF) can also participate in the new pension scheme announced by the Government.

Though the scheme is primarily for Central Government employees who have joined the public services after January 1, 2004, the ordinance says that any person governed under the EPF may also opt to join the scheme. Under the new pension scheme, the monthly contribution of employees would be 10 percent of the salary and dearness allowance and this would be matched by the Central Government. However, it has been clarified that there will be no contribution from the Government in respect of individuals who are not Government employees.

Moreover, State Government employees are also eligible to join the new scheme, if the State, by a notification, extends it to its employees. States that are making quick progress in their pension fund reforms are Tamil Nadu, Andhra Pradesh, Rajasthan, Madhya Pradesh, Gujarat, Kerala, Orissa, Himachal Pradesh and Chhattisgarh.

Others who are eligible to opt for the new pension scheme are those who are members of the Coal Mines Provident Fund, Assam Tea Plantations PF, Jammu and Kashmir Employees PF and Seaman's PF.

However, the Ordinance caveats that subscribers cannot exit from the scheme except as specified by a Central Government notification. This notification is yet to be issued.

The five-member Pension Fund Regulatory and Development Authority (PFRDA) will permit one or more pension funds to receive contributions, accumulate them and make payments to subscribers.

It is also understood that there would be a "default option" of a pension fund manager and a pension fund for subscribers who do not want to choose among the various service providers and their products. This default fund manager is likely to be a public sector undertaking.

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EPF members can opt for new pension scheme

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