There is good news for lakhs of employees working in the private sector of the country. With the decision of the Supreme Court, his pension can be increased by at least Rs 8500.
The Employees’ Provident Fund Organization (EPFO) has put a cap of Rs 15000 on the basic salary of lakhs of employees working in the private sector and on the basis of this pension is calculated.
But, after the decision of the Supreme Court, this cap will be removed and the pension will be calculated at Rs 20000 instead of Rs 15000. If this happens, then the monthly pension of the employees can be increased by at least Rs 8500.
EPFO has put a cap on 15000, even if the salary of an employee is more than Rs 15000, then the PF on salary will be calculated at Rs 15000 only. That is, if the basic salary of an employee is Rs 50000 and he wants to calculate his pension on 50000 only, then he cannot do so. The reason for this is that there is a cap on Rs 15,000 from EPFO.
Pension will increase on abolishing the salary limit
, however, hearing is going on in the Supreme Court regarding this matter. If the Supreme Court does away with the salary limit, then PF can be calculated on the highest bracket as well. That is, if the basic salary is more than Rs 15000, the PF money will be deducted at the highest level. With the decision of the Supreme Court, employees will get many times more pension.
What is the matter
Employees’ Pension Revision Scheme was notified by the Central Government on 1st September 2014. At that time the private sector employees opposed it. On this EPFO filed an SLP in the Supreme Court. The Supreme Court decided to hold a hearing. On 1 April 2019, while hearing EPFO’s SLP, it said that the employees who are contributing on the basis of their actual salary, they are depositing with their company in the form of joint option.
They are unable to take advantage of the benefits of the pension scheme without justification. There is no justification for fixing the pension salary at Rs 15,000. The matter is being heard continuously since August 17 and the matter is still pending.
How much will the pension increase?
If the salary (basic pay + dearness allowance) of an employee is 20 thousand rupees. According to the pension formula, the pension will be Rs 8,571 instead of 7500. EPS calculation formula = Monthly Pension = (Pensionable Salary x EPS Contribution) can be checked. That is, there can be a direct increase of 300% in the pension.
