The Employees’ Provident Fund Organisation has supported a labour ministry proposal to allow its subscribers switch to the National Pension System (NPS), according to an article in The Economic Times. However, it said the move needs to be backed by amendments to the Pension Fund Regulatory and Development Authority Act.
EPFO wants the PFRDA act to be amended to allow those who opt for the National Pension System to return to the Employees’ Pension Scheme under the EPFO, which is currently not possible.
NPS is a voluntary, defined contribution plan regulated by PFRDA. The Central Board of Trustees of the EPFO, chaired by the labour minister, is likely to meet next month to discuss the proposed amendments, said ET. According to the paper, the labour ministry had called for a tripartite meeting last month on the proposed amendments to the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, which 10 central trade unions boycotted.
The Trustees, comprising representatives of employees and employers besides those from the Centre and the state governments, will consider the EPFO’s views before the matter is sent to the labour ministry, reported ET.
The RSS-affiliated Bhartiya Mazdoor Sangh, which was one of the few trade unions that attended the meeting, rejected the proposal outright, saying NPS is not on a par with the Employees’ Pension Scheme and there is no certainty on the rate of return. In NPS, funds are partially invested in stock market.
The labour ministry had moved an amendment to the Provident Funds Act, proposing to allow EPFO subscribers to opt for NPS instead of the Employees’ Pension Scheme.