The Supreme Court struck down a condition of the 2014 scheme that mandated employees to make an additional 1.6 per cent contribution on salaries above Rs 15,000. The EPFO and the Central Government challenged the decision of the Kerala, Rajasthan and Delhi High Courts in the Supreme Court.
Supreme Court has given a big decision regarding pension. It has said that the provisions contained in the Employees’ Pension Amendment (Scheme), 2014 are lawful and valid. The country’s highest court has canceled the salary limit of Rs 15,000 per month to join the pension fund.
The Supreme Court has said that after the amendment in the scheme, the maximum pensionable salary will have to be kept at 15,000 every month. A bench of the Supreme Court gave this decision. Apart from Chief Justice U U Lalit, two more judges were included in this bench.
The bench said that in the amended scheme, the rule of contribution at the rate of 1.6 percent for the monthly salary amount more than Rs 15,000 for the members has also been quashed. It has said that the additional contribution of 1.6 per cent is beyond the purview of the provisions of the 1952 Act.
The Supreme Court has given four months to EPFO members availing EPS to opt for contribution of 8.33 per cent of their actual salary instead of their pensionable salary. The Supreme Court has amended the orders of the Kerala, Rajasthan and Delhi High Courts.
The Supreme Court has given this decision on the petition of several petitioners including the EPFO and the Central Government. It has said that the fund authorities will have to plan the directions included in the decision within eight weeks. The bench has also said that the employees who have not exercised the option to join the pension scheme will have to exercise the option within six months.
The country’s biggest court has also said that eligible employees who could not join the scheme till the last date should be given additional opportunity for this. This is because the situation has remained unclear after the Kerala, Rajasthan and Delhi High Courts’ decisions on this issue.
The Supreme Court struck down a condition of the 2014 scheme that mandated employees to make an additional 1.6 per cent contribution on salaries above Rs 15,000. The EPFO and the central government challenged the decision of the Kerala, Rajasthan and Delhi High Courts in the Supreme Court.
According to the Employees’ Pension Scheme, 1995, the maximum salary for calculation of pension was Rs.6,500 per month. From employers’ contribution (12 per cent), 8.33 per cent goes into the Employees’ Pension Fund (EPS). A provision was added to the EPS on March 16, 1996. In this, employees and employers were given the option to contribute more to the pension fund.
The Employees’ Pension Scheme was revised in September 2014. Under this, the maximum pensionable salary was capped at Rs 15,000 per month. Members up to September 1, 2014 were given an option to contribute on salary exceeding Rs 15,000 per month. Under this, the employee had to give a joint application with the employer.