“The functional directors of Coal India have decided to bring the proposal to the next board meeting. The decision to absorb the additional expense or pass it on to consumers would also be discussed, ”said a senior Coal India executive. “If it were absorbed, it would be an additional burden on Coal India, which currently suffers from a serious liquidity problem. If passed on, it will increase prices slightly.
Monthly pensions are calculated on the basis of an average salary over 10 months before retirement and have no ceiling unlike the scheme of the Employees’ Pension Fund (EPF). The fund currently receives around Rs 309 crore from some 480,000 coal workers, while Rs 283 crore is spent each month to pay the pensions of 500,000 retired coal workers.
In January, the board of directors of the Coal Mines Provident Fund Organization (CMPFO) decided to ask member companies to make the additional contribution, which is estimated to add Rs 700 crore to the fund each year, more than enough for the fund lasts for the long term. Course.
“All coal producers must make an additional voluntary contribution to the Coal Mines Pension Fund so that it can continue to pay workers’ pensions,” CMPFO commissioner Animesh Bharti told ET.
“Following the decision, we were to ask all charcoal companies to contribute, but the process was significantly slowed down due to the lockdown. We will follow up with all companies once the foreclosure is complete – every company must agree or the possibility of liabilities far exceeding assets will continue to disrupt the fund. ”
Since 2016-17, outflows from the fund have exceeded inflows, reducing its size, leading to a revision of the employee and employer contribution from around 5% to 14% in 2018. However, this was not enough .
Employees of Coal India, Singareni Collieries, mining division of DVC, coal mine workers of Sail, Jindal Steel & Power, Jindal Power, Jayaswal Neco Industries, Monnet Ispat & Energy and
& Minerals are covered by the CMPFO.