Only workers below 40 can join new pension scheme

Finance Minister Piyush Goyal. (PTI File Photo)

Finance Minister Piyush Goyal announced a new pension scheme for unorganised sector labourers with a flourish in his budget but a government notification shows that only those below 40 years can join the scheme, leaving a large number out of the ambit of the scheme.

The specifics of the scheme has not gone down well with the trade union activists, who said the government is taking away money from the workers for private enterprises while excluding those who are really in need of a social security scheme.

They argued that the first pension will be paid to the beneficiary only 20 years later while taking money from them all these years. In the unorganised sector, there are about 42 crore workers and the government expects that at least 10 crore workers will avail the benefit within the next five years.

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According to the Ministry of Labour and Employment notification, an unorganised worker who is above 18 years and below 40 years with a monthly income less than Rs 15,000 can join the 'Pradhan Mantri Shram Yogi Maan-dhan 2019', which provides for a Rs 3,000 per month pension from the age of 60 years, from February 15. Only spouses can be the nominee and can avail 50% of the pension if the beneficiary dies.

After the death of the subscriber and spouse, the corpus will be credited back to the Pension Fund. If one joins the scheme at the age of 18, he will have to pay Rs 55 per month, while if one joins at 29, he will have to pay Rs 100. Those joining the scheme at 40 will have to pay Rs 200. The government will be paying a matching amount.

A subscriber defaulting in paying his contribution can regularise it by depositing the outstanding dues with “interest of the rate as determined” by the government.

“The scheme is meant to be a social security scheme for unorganised sector. Instead, it has now become a financial security scheme for the government provided by the workers. For 20 years, the workers will be paying the government. They are taking away the money in the name of social security,” CITU National Secretary A R Sindh told DH.

CPI(ML) Polit Bureau member Kavita Krishnan said many workers in unsafe professions do not even live up to 60. “Moreover, for the worker under 40 with an insecure job, what does the promise of a Rs 3000 pm pension past the age of 60 mean? It only means a premium she pays now which becomes a burden, especially if she is between jobs,” she said.

Sindhu also pointed out the inadequate fund allocation for rolling out the scheme. Goyal has allocated Rs 500 crore with a promise of providing additional funds as and when required.

The activists also found fault with the exclusion of workers above 40 years, saying they needed the pension most.

The worker who wants to join the scheme needs to have a savings bank account and Aadhaar number to join the scheme. If the worker is already covered under the National Pension Scheme, Employees' State Insurance Corporation scheme (ESIC) or Employment Provident Fund (EPF) scheme, he or she will not be eligible.

A worker can exit the scheme before 10 years and his contribution will be returned with savings bank rate of interest only while if one exits after 10 years, then the contribution will be refunded with accumulated interest.

If a subscriber dies, his or her spouse can continue with the scheme subsequently by paying regular contribution or exit by receiving the share of contribution paid by the worker along with accumulated interest.

Also, if an eligible subscriber has given regular contributions and become permanently disabled due to any cause before attaining his age of 60 years, and is unable to continue to contribute under this scheme, his spouse can continue with the scheme or exit the scheme by receiving the share of contribution along with interest as actually earned by the Pension Fund.

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Only workers below 40 can join new pension scheme

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