Coal miners' pension unrevised due to shortfall in accrual of pension fund

No revision in 25 yrs due to resistance from central trade union representatives, says coal minister

The pension received by coal miners under the Coal Mine Pension Scheme (CMPS), 1998, has not been revised in the past 25 years due to the gap between accrual and disbursement, coal minister Pralhad Joshi informed Parliament on February 8.

Responding to a question from opposition Congress parliamentarian Uttam K Reddy, the minister said in a written reply that due to resistance from Central Trade Union representatives, the provision to enhance the pension fund could not be approved. This, he said, led to a shortfall in the pension corpus, which is why the pension hasn’t been revised in over two decades.  

“CMPS provides for valuation and review of the pension fund and the commissioner, Coal Mines Provident Fund Organisation (CMPFO), is responsible for [the] valuation of the pension fund every third year by an actuary to be appointed by the Board of Trustees, CMPFO. The actuarial evaluation report 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,” Joshi replied.

Despite the increase in contribution to 14 per cent in 2017, the corpus couldn’t be replenished, since only Rs 4,187 crore was deposited in FY22, whereas Rs 4,449 crore was disbursed as pension in the same year. 

The minister also informed the House that the government had carefully considered and agreed in principle with the recommendations of the 12th Public Accounts Committee (PAC) report for a revision in the pension scheme. In its report in 2021, PAC had noted that financial mismanagement of the pension scheme had depleted the corpus.

“The committee notes that the Ministry of Coal has been apparently found severely wanting in discharging its nodal administrative role, which resulted in financial mis-management by CMPFO," the report had noted.

Earlier last week, on Friday (February 3), during a Board of Trustee meeting, the coal ministry gave an “in-principle approval” to a proposal to increase the cess levied on coal production from the current Rs 10 per tonne to Rs 15 per tonne to replenish the pension fund corpus and bridge the shortfall.

Pension gap

	Financial year	Accrual (Rs in crore)	Disbursement (Rs in crore)
	2017-18	1,031	2,459.81
	2018-19	3,084.12	2,842.29
	2019-20	3,519.14	3,369.57
	2020-21	4,520.14	3,831.54
	2021-22	4,187.82	4,449.74
	Source: Lok Sabha