Coal mines PF likely to raise contribution to address deficit

By: | Published: February 2, 2015 1:20 AM

The Coal Mines Provident Fund Organisation (CMPFO), which runs the coal mines pension scheme...

The Coal Mines Provident Fund Organisation (CMPFO), which runs the coal mines pension scheme, is mulling an increase in employees’ and employer’s contribution to address the Rs 26,341-crore deficit in the fund. Amrita Acharya, CMPFO commissioner and also the coal controller, told fe that “since the fund is contributory, employees will have to contribute more to create adequacy. The CIL board will have to take a call on increasing the contribution and this has to be done through creating consensus with the trade unions, which form a part of the national coal wage agreement.”

An official in CMPFO said the Coal Mines Pension Scheme was one of the four schemes that the CMPFO manages for its employees benefit. The CMPFO manages Coal Mines Provident Fund Scheme, Coal Mines Family Pension Scheme, Coal Mines Pension Scheme and Coal Mines Deposit linked Insurance Scheme, for which the total contribution of employees and the employer are 12% of the total monthly emolument, respectively. Of the 12% contribution each, 1.1-1.6% of the monthly emolument goes to the coal mines pension scheme with the ceiling for the contribution kept at Rs 1,600 per month.

“While this contribution has to increase, the payment on this account has to decrease. The payment under the coal mines pension scheme is calculated on the basis of the basic salary that an employee gets in last year of his service. We are contemplating to take the basic salary of the last five years as the basis of calculating the pension pay out so that the burden can be reduced,” a CMPFO official said, adding it wasn’t a crisis for the three lakh pensioners and can be easily adjusted.

Both the employer and employees’ contribution is spread across four funds and there is no deficit in the other three funds. The deficit in the pension fund is only a matter of adjustment, the official said.

He said the committee formed under the joint secretary in coal ministry would soon give its recommendation, following which CIL director-personnel would refer it to the board, the official said.

SQ Zama of AITUC said the deficit has occurred because of an increased retirement rate while the number of contributors has not gone up proportiantely. More than 1 lakh contributors have become pension holders but another lakh has not been appointed as contributor.

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