EPFO Pension Scheme News Update : The Supreme Court has taken a big decision today regarding the Employees’ Pension (Amendment) Scheme for the year 2014. The Supreme Court on Friday termed the Employees’ Pension (Amendment) Scheme for the year 2014 as “legal and valid”.
New Delhi. The Supreme Court on Friday took a big decision regarding the Employees’ Pension (Amendment) Scheme for the year 2014. The Supreme Court termed the Employees’ Pension (Amendment) Scheme of the year 2014 as “legal and valid”. Giving relief to many employees, the court said that those employees who have not yet exercised the option of joining the Employees’ Pension Scheme, should be given another 6 months to do so.
Explain that the court has abolished the limit of Rs 15,000 monthly salary to join the pension fund.
Which in the amendment of the year 2014, the limit of maximum pensionable salary (inclusive of basic pay and dearness allowance) was fixed at Rs 15,000 per month and before the revision the maximum pensionable salary was Rs 6,500 per month.
6 months given time to join pension scheme
Chief Justice U.U. Lalit, Justice Aniruddha Bose and Justice Sudhanshu Dhulia said that the employees who have not exercised the option of joining the pension scheme, will have to do so within six months. The bench said that the eligible employees who could not join the scheme by the last date should be given an additional chance as there was lack of clarity on the issue in the judgments passed by the High Courts of Kerala, Rajasthan and Delhi.
This condition was also declared invalid
The bench also struck down this condition in the 2014 plan, in which employees will have to make an additional contribution of 1.16 per cent on wages above Rs 15,000. The bench also said that the condition of making additional contribution on salary in excess of the limit would be voluntary, but added that this part of the decision would be kept suspended for six months to enable the officers to generate funds.
Know the whole matter
The controversy mainly pertains to the controversial amendments made to Article 11 of the EPS-1995. Before the amendment was introduced, every employee who became a member of the Employees’ Provident Fund Scheme 1952 on November 16, 1995, could avail the benefit of EPS.
The maximum pensionable pay limit in the pre-revised version of EPS-1995 was Rs 6,500. However, members whose salary exceeds this limit can choose to contribute 8.33% of their actual salary along with that of their employers.
EPS was amended in 2014, which included a change in paragraph 11(3) and a new paragraph 11(4), raising the cap from Rs 6,500 to Rs 15,000. Paragraph 11(4) states that only those employees who were existing EPS members as on 1st September 2014 can continue to contribute to the Pension Fund as per their actual salary. He was given six months to choose the new pension system.
In addition, 11(4) created an additional liability for those members whose salary exceeded the limit of Rs 15,000. He was to contribute at the rate of 1.16% of the salary.