Here's how EPFO decision on commutation BENEFITS 6.3 lakh pensioners
BIG DECISION BY CBT: In a move that will benefit as many as 6.3 lakh pensioners under the Employees Pension Scheme (EPS), the commuted value of pension after 15 years of drawing commutation will be restored. The Central Board of Trustees (CBT), the apex policy making body of the pension scheme, approved the proposal to recommend an amendment in the Employees Pension Scheme (EPS) 1995 for the restoration of commuted value of the pension to pensioners after 15 years of drawing commutation. This comes as a big relief as it was a long-pending demand of the pensioners. But how will it benefit lakhs of pensioners? Here's an insight:
BENEFITS TO 6.3 LAKH PENSIONERS
- The move is set to benefit pensioners who had opted for commutation and got a lump-sum amount at the time of retirement before 2009. The provision for commutation of pension was withdrawn by the EPFO in 2009.
- Under the commutation, monthly pension used to be cut by one-third for the next 15 years and the amount was given in lump sum. After the 15 years, the pensioners were entitled to get full pension.
Other key decisions:
ETF: The Central Board of Trustees (CBT) approved the decision to choose Exchange Traded Fund (ETF) manufacturers through public bidding by October 30, 2019, extension of the term of the present ETF manufacturers (SBI MF and UTI MF) till then, and also authorised the Finance Investment and Audit Committee (FIAC) to conduct the exercise of choosing ETF manufacturers.
Allocation of investment in Nifty50 and Sensex: The board approved the proposal for even allocation of funds between Nifty50 and Sensex ETFs, ie. in the ratio of 50:50.
Appointment of a consultation in addition to CRISIL Ltd: CBT approved the nomination of members from the employer's and employee's side in a committee constituted to select and appoint a separate agency/consultant in addition to CRISIL Ltd, inter alia, to review the working of portfolio managers and assist the investment committee in redemption of ETFs, among others.
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