News By/Courtesy: Ambuja Jain | 06 Apr 2019 20:04pm IST

On Monday, the Supreme Court of India paved the way for higher position to all private sector employees by dismissing a special leave petition files by Employees Provident Fund Organisation (EPFO) against a Kerala High Court judgement to set aside Employee’s Pension (Amendment) Scheme, 2014.  The High Court had asked EPFO to give pension to all retiring employees on the basis of their full salary, rather than capping the figure on which contribution is calculated at a maximum of Rs.15,000 per month.

The government’s Employee Pension Scheme was introduced in the year 1995 for the organized sector employees, which is eligible to all employees covered under the EPF scheme. People who come under the scheme receive a pension on a permanent basis. Earlier, the employee was supposed to contribute 8.33% of their employee’s salary, but then the contribution was capped at 8.33% of Rs.6,500. Then, later on, the government amended the act and allowed a contribution to any percentage of the actual salary in case both employee and employer has no objection regarding it. In 2014, the act was amended by EPFO and increased the contribution to 8.33% of a maximum amount of Rs.15,000. It also included that the pension on full salary will be calculated as an average of last five years’ monthly income and not just in the past one year’s salary. But, this amendment had lowered the pension of many employees.

The Supreme Court said that they find no merit in the Special Leave Petition, so the same is dismissed. As the plea filed by EPFO is dismissed, the Supreme Court had asked Employees Provident Fund Organisation to provide higher pension to all private sector employees and had also asked the organization to pay full pension to retired employees on the basis of their total salary instead of capping the amount on which the contribution of a pensioner is calculated at a maximum of Rs.15,000 per month.  Before also, a number of High Courts like Kerala, Rajasthan, Andhra Pradesh, and Madras, and others have ruled in favor of employees and had asked EPFO to allow them to contribute. Employees who have begun working after September 1, 2014, will be able to avail the benefit of pension on full salary. This decision of the Supreme Court is expected to settle the issue for once and for all.


Section Editor: Shreyashi Tiwari | 06 Apr 2019 20:08pm IST

Tags : #Private #Sector #Employees #EPF #SC #Retired #Employees

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