EPS-95 Pension Funds: Is the Government’s 1.16% Contribution an Expenditure or a Deposit?

” Is it Expenditure OR Deposit in Central Government Account”

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The Closing Corpus of Employees’ Family Pension Scheme, 1971 as on 15-11-1995 which is 8,252 Crores which consists of 1) Employees’ Contribution (1.16%), 2) Employer’s Contribution (1.16%) and Government of India Contribution (1.16%) was kept in the Central Government Account. From 16-11-1995 the Government share of 1.16% which remains as it is is being credited to the same Central Government Account till now. On this Central Government announces Interest from time to time.

Thus the revised expenditure on account of increase in the Ceiling from 15,000/- to 25,000/- of 1.16% is 11,339 Crores against 10,250 Crores, an increase of 1,089 Crores is being shown as Additional Expenditure in the Budget and at the same time gets deposited in the Central Government. Perhaps this is the only item of Expenditure in the entire Budget presented by Central Government every year on 1st February which is shown as expenditure and at the same time credited again to the Central Government Account.

It is well known fact that the Contributions of Employees’, Employers’ and and Government always remains as Investments and the expenditure towards Pensions and payment of withdrawal Benefit is met from Interest Income for the past more than 55 years i.e., from 01-03-1971 to 30-09-2026.

The deficit shown in Acturial Valuation at the end of the Financial Year is deficit in Investments which fact EPFO/Government never reveals. But Common Man’s understanding is it is the difference between the Expenditure and Income. Here the Annual Income is 1,30,000 Crores and Expenditure is 26,000 Crores a Surplus of 1,04,000 Crores actually.

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