Revision of pension for coal sector workers – Rajya Sabha QA

Revision of pension for coal sector workers every three years – Rajya Sabha QA

GOVERNMENT OF INDIA
MINISTRY OF COAL
RAJYA SABHA
UNSTARRED QUESTION NO. 2439
ANSWERED ON 08.08.2022

Revision of pension for coal sector workers

2439 Shri Binoy Viswam:

Will the Minister of Coal be pleased to state:

(a) whether Government is aware that the Coal Mines Pension Scheme provides revision of pension of coal workers every three years;

(b) whether Government is also aware that the last revision was done in 1998, if so, the reason for non-revision; and

(c) whether Government will give an assurance that revision will take place this year considering the abysmal pensions?

ANSWER

MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES
(SHRI PRALHAD JOSHI)

(a) Coal Mines Pension Scheme, 1998 provides for valuation and review of the pension fund. The Commissioner, Coal Mines Provident Fund Organisation (CMPFO) is responsible for valuation of the Pension Fund every third year by an Actuary to be appointed by the Board of Trustees, CMPFO (BoT). When the Pension Fund permits, BoT on the recommendation of an Actuary and with the approval of the Central Government may amend the rates of contribution payable under the Scheme or the scale of any benefits admissible or the period for which such benefit may be allowed;

(b) Coal Mines Pension Scheme, 1998 came into force on 31st day of March, 1998 as a defined contribution defined benefit scheme. However, the contribution is not commensurate with the benefit. The actuarial evaluation report, which is based on the detailed analysis and taking into account various critical aspects like defined contribution for defined benefit, number of pensioners, number of active workers, their dependents etc., to make the funds sustainable, was placed before the BoT from time to time. However, due to the resistance by the Central Trade Union representatives, who are also members of the BOT, the recommendation of the actuary to enhance pension contribution could not be implemented. The contribution to the fund was revised to 14 per cent from the erstwhile 4.91 per cent with effect from 1st October, 2017. Despite this, contribution to the fund is less than the disbursement. Upward revision of pension was not possible due to the gap between accrual and disbursement. Average monthly contribution and disbursement during the years 2020-21 and 2021-22 are given in the table below:

As per actuarial valuation, net liability of pension was Rs. 40,976.64 crores as on 31st March, 2015 which has increased to Rs. 42,391.63 crores as on 31st March, 2019.

(c) Revision of pension is not possible due to the widening gap between
contribution to the fund and pension disbursement.

Source: Rajya Sabha