Cooperative pension: Institutions should set aside 10% of annual profit

Thiruvananthapuram: The committee appointed by the government to revise the rules and regulations for cooperative institutions in the state has recommended that these institutions set aside 10% of their annual profit for employees pension. This amount should be handed over to the Cooperative Pension Board. The committee has also suggested that a provision be included to penalise the head of the cooperative institution if new members are not enrolled in the pension scheme.

The committee believes that these new recommendations will help address the financial crisis faced by the Cooperative Pension Board and ensure future financial stability, thereby ensuring the smooth operation of the pension scheme. Until the Board reaches financial stability, the committee recommends that the government allocate a share in the annual budget to support the scheme.

According to the committee, new employees should be enrolled in the pension scheme within three months of joining. If this is not done, a fine of Rs. 5,000 should be imposed on the head of the institution. The committee also suggests that the practice of investing pension funds in fixed deposits with Kerala Bank should be discontinued. Instead, the funds should be invested in mutual funds managed by banking companies.

Key Recommendations:

1. The pension share contribution of employees should be increased by 3%. In addition, a 1% administrative charge should be deducted from their share.
2. Cooperative institutions could increase their revenue by offering loans to employees and board members.
3. A system should be introduced to calculate 10% of the pension share separately, with the amount given to the employee with interest upon retirement.
4. Medical insurance should be made available for employees and pensioners.
5. A provision should be included in the cooperative rules allowing employees to opt for Voluntary Retirement Scheme (VRS).