EPFO Private Sector Employees Pension Scheme: The Supreme Court Monday dismissed the Special Leave Petition filed against a Kerala High Court order that had asked Employees Provident Fund Organisation to provide pension to all retiring employees, rather than capping the figure to Rs 15,000 per month. In effect, all retiring employees will now get pension on their full salary instead of the Rs 15,000 cap.
The bench comprising CJI Ranjan Gogoi, Justice Deepak Gupta and Justice Sanjiv Khanna dismissed the plea filed by EPFO saying that it finds no merit in the special leave petition.
The Kerala High Court in 2018 had nullified the amendments made to the Employees’ Pension Scheme in 2014. According to the new rules, new employees who earned more than the capped wages would not be eligible for EPS. Existing employees who were contributing on higher salary could continue to do so provided they made fresh applications along with the employer in a year’s time, failing which their contributions would be restricted to the capped wages.
The Employees’ Provident Fund is a retirement benefits scheme that was structured to provide financial security to employees of factories and other establishments.
While 12 per cent of the basic salary and dearness allowance have to be contributed by all employees earning up to Rs 15,000 per month (not mandatory for others), the employer component (12%) has to be contributed mandatorily in case of all employees. The employer’s component is split into EPF (3.67%) and the Employees’ Pension Scheme (8.33%).