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  • Category: Miscellaneous

    Supreme Court clears decks for employees to get higher pension on actual Salary- Basic plus DA

    As per the Employees Provident fund Pension Scheme 1995, the wages for contribution and for calculation of Pension is limited to Rs.15,000/-. In other words , if the salary of a person [Basic+da] is say Rs. 60, 000/- per months for the calculation of pension same is restricted to Rs.15,000/-.

    Now Hon'ble Supreme in its judgment upheld the judgments of Kerala High Court which allowed pension on actual Salary. Hon'ble Supreme Court in its order passed yesterday, dismissed the Special Leave Petition filed by EPFO against Kerala High Court Judgment.

    With the above judgment many employees of both Government and Private Sector employees are eligible to get higher pension.

    Following is the method of calculation.

    Example: Salary - Basic+DA- Rs.50,000- Service - 30 Years.

    Existing pension: Salary limited to Rs. 15,000x30/70 = Rs.6428

    New pension: Salary Rs.50000 - Rs.50000x30/70 = Rs.21,428

    However, employees will be required to refund the difference of recovery on actual Salary from 1995 to EPFO to become eligible for revised pension.
  • #661649
    This is a piece of good information for the Private sector employees who are getting a very meagre pension after retirement. The difference between what presently is being paid and what the court order says is very high. A person who is presently getting a pension of Rs.2000/- may go to Rs.25,000/-. Whatever difference we may have to pay to EPFO as the contribution for EPF may get back as arrears for the old period. This is a very good decision. Presently the pension they are paying for the amount we have lost due to management's contribution given to EPFO is very less and not even equal to the bank interest on the amount we have lost from Employer's contribution.
    I think many people will get benefitted with this. But the court decision is to be implemented by EPFO without thinking for ways and means of delaying the issue without considering the problems of the retired employees. Very good support from the Supreme Court for the retired people.

    drrao
    always confident

  • #661651
    This was a long pending issue and retired employees associations and other agencies were fighting for it for quite some time. Let us hope that this is implemented soon and the employees who have contributed in the EPF95 scheme will be benefited by it.

    EPF95 was made a mandatory scheme by the Govt in spite of resistance from the PSUs as the PSUs felt that their CPF or PRBS scheme was already there to take care of the employees post retirement needs. Moreover EPF scheme gave a small pension of only Rs 1000 to 1800 per month.

    This court verdict will change the whole perspective of EPF95 scheme.

    Thoughts exchanged is knowledge gained.

  • #661662
    It appears that struggling days for the pensioners enjoying the benifits of eps 95 pension scheme are over with the judgement of the Supreme Court. When the scheme was formulated initially in the year 1995, it had a great flaw by capping the maximum pensionable salary up to 6500. This resulted a meagre pension of all employees despite the fact that their basic salary coupled with DA was substantially higher and the irrational calculation of the pension amount made the lives of the retired people worst.
    Some of the leading organisations were interested to start their own scheme but the move of the government was to cover the employees under the same basket assuring them of attractive pension on their retirement. However, one thing that went to the favour of the government was the less burden as a result of less pay out by way of pension amount to the benificiaries.
    However, this has to be seen when such facilities would be implemented to the retired people since any delay in this regard would further compound their problems.

  • #661678
    EPF scheme was formulated on a very different idea of contributing a small amount per month for getting a small pension once a person reaches the age of 58 years.

    I do not know who are the minds behind this scheme but their basic assumptions were totally faulty and impractical as they did not consider the inflation and could not foresee that what contribution will be required for a respectable pension.

    Long back sometime in 1996 when EPF95 scheme was deducting an amount of only Rs 15 per month from the employees then that time itself the fate of the scheme was known that the pension would be around Rs 1000.

    Today when we look back that contribution should have at least Rs 300 per month and then gradually increasing as the pay increases.

    Sometimes we are pained to see who are the people who make such childish schemes without any vision element embedded in it.

    There was so much fight between the subscribers and EPF organisation as the EPFO always told that there is no money to pay the enhanced pension. Naturally if they have not taken the proper contribution from the subscriber, from where money will come.

    Anyway now it seems to be resolved to some extent and now EPFO, in light of the court order, will ask Govt to give funds for pension distribution and if Govt delays in giving the funds citing any reason the process will be delayed further.

    Knowledge is power.


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