The labour ministry will soon issue a notification to restore pension commutation, or advance partial withdrawal, under the Employees’ Pension Scheme of the Employees’ Provident Fund Organisation (EPFO) from January 1, 2020.
The move, which comes 10 years after the provision was withdrawn, follows a decision at a recent meeting of the EPFO’s central board of trustees and it will benefit around 630,000 pensioners.
A government official said these pensioners had opted for commutation of their pension and got a lump sum amount at the time of retirement from their pension accumulations or fund before 2009, when the provision for commutation of pension was withdrawn by the EPFO.
“The labour ministry will issue a notification on January 1, 2020, to implement the EPFO’s decision to restore commutation, or advance part-withdrawal, under the Employees’ Pension Scheme,” said the official, who did not wish to be identified.
Under the commutation, one-third of the monthly pension used to be cut for the next 15 years and the reduced amount was given in lump sum. After 15 years, pensioners were entitled to get the full pension.
The EPFO’s central board of trustees, headed by the labour minister, had in its meeting held on August 21 approved the proposal to restore commutation of pension of around 630,000 pensioners who had opted for the benefit,.
An EPFO panel had recommended an amendment to the Employees’ Pension Scheme, 1995 to restore commuted value of pension to pensioners after 15 years of drawing commutation. Earlier, under the scheme, government employees were allowed to commute one-third of their pension for 10 years, which was restored after 15 years.