Employees Pension Scheme: The Employees Pension Revision Scheme, 2014 was implemented by the Central Government from September 1, 2014 by issuing a notification.
Private sector employees can get relief soon. With a decision, the pension (EPS) of lakhs of employees contributing to the Employees’ Provident Fund (EPF) can increase by 300% in one stroke.
The Employees’ Provident Fund Organization (EPFO) has fixed the maximum salary of Rs 15,000 (basic pay) for the pension of the employees. Meaning, even if your salary is more than Rs 15,000 per month, but your pension will be calculated only on the maximum salary of Rs 15,000.
One decision and pension can increase manifold
Hearing is going on in the Supreme Court to eliminate this salary-limit of EPFO. Employee Pension (Employee Pension Scheme) can also be calculated on the last pay i.e. higher pay bracket. With this decision, the employees will get many times more pension.
Let us tell you, to get the pension, it is necessary to contribute to the Employees’ Provident Fund (EPF) for 10 years. At the same time, on completion of 20 years of service, a weightage of 2 years is given. If the Supreme Court decides to remove the limit, then how much difference will it make, let’s understand…
How to increase your pension –
According to the current system, if an employee is working from June 1, 2015 and wants to take pension after completing 14 years of service, then his pension will be calculated at Rs 15,000, irrespective of the number of years for which he is working. Are. 20 thousand Rs. Be in the basic salary bracket or Rs 30,000.
According to the old formula, on completion of 14 years, the employee will get a pension of about Rs 3000 from June 2, 2030. The formula for calculation of pension is- (Service Historyx15,000/70). But, if the Supreme Court decides in favor of the employees, then the pension of the same employee will increase.
Example number 1
Suppose the salary (Basic Salary + DA) of an employee is 20 thousand rupees. His pension will be Rs.4000 (20,000X14)/70 = Rs.4000 by calculating the pension formula. Similarly, higher the salary, higher will be the benefit of pension. There can be a jump of 300% in the pension of such people.
Example No.-2
Suppose the job of an employee is 33 years. His last basic salary is 50 thousand rupees. Under the current system, pension was calculated on a maximum salary of Rs 15,000. Thus (formula: 33 years + 2 = 35/70×15,000) the pension would have been only Rs 7,500.
This is the maximum pension in the current system. But, after removing the pension limit, adding the pension according to the last salary, they will get a pension of 25000 thousand rupees. Means (33 years + 2 = 35/70×50,000 = Rs 25000).
Pension can increase up to 333%!
Let us tell you that according to the rules of EPFO, if an employee contributes to the EPF continuously for 20 years or more, then two more years are added to his service. Thus 33 years of service was completed, but pension was calculated for 35 years. In such a situation, the salary of that employee can increase by 333 percent.
What is the whole matter
The Employees’ Pension Revision Scheme, 2014 was implemented by the Central Government from 1st September 2014 by issuing a notification. This was opposed by the private sector employees and in the year 2018 it was heard in the Kerala High Court. All these employees were covered by the facilities of the EPF and Miscellaneous Provisions Act, 1952. Employees protested against EPFO’s rules, saying it ensures them less pension.
Because even if the salary is more than 15 thousand, but the calculation of pension has been fixed at the maximum salary of 15 thousand rupees. However, before the amendment made by the central government on September 1, 2014, the amount was Rs 6,500. Considering the EPFO’s rules to be unfair, the Kerala High Court had ruled while accepting the writ of the employees. On this, the EPFO filed an SLP in the Supreme Court, which was rejected by the Supreme Court.
Decision came in 2019
The Supreme Court decided to hear its decision again. A Division Bench of Justice Surendra Mohan and Justice AM Babu, while hearing the SLP of EPFO on 1st April 2019, observed – Employees, who are contributing on the basis of their actual salary after furnishing joint option with their employers, as deemed fit It is necessary. Huh,
They are deprived of pension scheme benefits without justification. There is no justification for fixing the pension salary at Rs 15,000. The bench said that 15 thousand monthly i.e. 500 rupees per day. It is common knowledge that even a daily wage earner gets more salary than this. So limiting the maximum salary for pension to Rs 15000 thousand will deprive most of the employees of good pension in old age. As far as the impact on pension funds is concerned,
Re-Hearing
In January 2021, the Supreme Court reconsidered its 2019 decision and decided to hear the matter. A petition was filed against the order of the Kerala High Court on behalf of the Ministry of Labor and EPFO. The EPFO is of the view that with this order the pension may increase up to 50 times (EPS upper limit). On August 25, a bench of Justice UU Lalit and Justice Ajay Rastogi, while hearing the matter, decided to refer the matter to a larger three-member bench. The case is still pending.
