Many protests are going on these days to obstruct the implementation of the proposed pension scheme for the private sector. Their main concern is threat to EPF and ETU. However it is timely requirement to understand the scheme well before protesting.
According to the government the objective of this scheme is to provide financial support for all the employees after retirement. This is a good idea for increasing elderly population.
The government will establish a fund for this scheme. The fund will be consisted of
- One billion rupees by the government,
- 2% of the salary from the employee,
- 2% of the salary from the employer,
- Money from the inactivated EPF accounts,
- 2% of the EPF at the time the employee obtain it etc.
The government does not halt EPF, ETF money or benefits and ETF, EPF schemes will be continued even after the establishment of new scheme.
A person needs to have a minimum of 10 year contribution to be entitled to the scheme. If the person stop contribution or die before 10 years 60% of the total contribution by the employee will be paid.
The benefits
- Employee will receive a monthly pension until his death after age of 60 years.
- Upon his death the wife will be entitled to obtained the pension until her death
What are the drawbacks?
- 10 year contribution and paying only 60% for the employees who couldn’t contribute for 10 years
- If the employee dies before 10 years no security to his family
- Age limit 60 years is too much for private sector
- Yet no clue about the amount of the pension that will be paid after retirement
To my knowledge the pension scheme is a timely requirement and people should help government to implement it minimizing drawbacks.
However most of the protesters do it without a sense for the sake of opposing the government.
What should the opposition parties and protesters do?
Come out with solutions to minimize the problems and to provide maximum (reliable) benefits to employees without trying to stop the whole process.
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