India has decided to exert pressure on countries that are reluctant to negotiate bilateral social security pacts for workers’ pension, by making it compulsory for expatriate workers to pay pension contribution here.

A notification will be issued within days, which will make all ‘international workers’ in the country pay monthly contribution from their salary towards pension contributions into India's social security system.

Accordingly, 'international' workers in India, which includes Indian passport holders working abroad who return to India for an employment stint and then head back overseas, would be required to park 24% of their salaries into the three social security schemes run by the Employees' Provident Fund Organisation (EPFO).

Organised sector workers, numbering about 40 million, are compulsorily covered under the EPFO for up to a monthly salary of Rs 6,500, while foreign workers in the country remit their retirement savings into their home country pension systems. But once the notification is issued by the fund, they too would be required to contribute to the EPFO.

"We are notifying a change in the provisions under the EPF Act of 1952 to introduce a clause for 'international workers.' Currently, expatriates have no compulsion to contribute to the EPF and usually continue to pay into their home country's social security system so that their pension account doesn't show a 'break in service'. Now, they will have to contribute to the EPF and will get the same treatment on withdrawals as Indian workers in their country," said a senior government official involved in the exercise.

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