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Relief to retiring public sector employees, SC rejects plea against Kerala HC order on EPFO pension scheme

EPFO Private Sector Employees Pension Scheme: By rejecting the plea, the Supreme Court today upheld the HC order. In effect, all retiring employees will now get pension on their full salary instead of the Rs 15,000 cap.

India TV Business Desk India TV Business Desk
New Delhi Published on: April 02, 2019 16:27 IST
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Relief to retiring public sector employees, SC rejects plea against Kerala HC order on EPFO pension scheme

 In a major relief to people retiring as public sector employees, the  Supreme Court today rejected a plea 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.

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.

What was the plea

The Special Leave Petition filed against a Kerala High Court order sought to reversal to the rules where pension was provided only to employees retiring with an income up to Rs 15,000 per month. According to these 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.

What was Kerala HC order, upheld today

The Kerala High Court in 2018 had nullified the amendments made to the Employees’ Pension Scheme in 2014. 

How will SC order affect people

By rejecting the plea, the Supreme Court today upheld the HC order. In effect, all retiring employees will now get pension on their full salary instead of the Rs 15,000 cap.

The Employees’ Provident Fund is a retirement benefit 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 per cent) has to be contributed mandatorily in case of all employees. The employer’s component is split into EPF (3.67 per cent) and the Employees’ Pension Scheme (8.33 per cent).

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