EPFO takes a stand before Supreme Court - Exempted trusts are not eligible for higher pensionAs per the Employees Pension Scheme 1995 [EPS] under Employees Provident Fund and miscellaneous provident fund Act 1952, the pension is calculated limiting the salary of the employees to Rs.15000/- PM. In other words even though the salary [Basic+DA] of an employee is more than Rs.15,000/- the recovery towards pension is limited to 8.33% of Rs.15,000/- and pension is also calculated limiting the Salary to Rs.15,000/-. However there was a option prior to the 2014 amendment to EPF Act under which employees were allowed to contribute 8.33% of the actual salary towards pension and such employees will also eligible for pension on the actual salary. Consequent to the 2014 amendment the option has been withdrwan.
Many employees and Unions of employees have filed Writ Petitions before various High Courts all over India seeking directions to EPFO to extend the option of paying pension contribution on actual Salary and also drawal of pension on actual salary. The High Courts of Kerala, Madras, AP have pronounced the judgments allowing the applications of Employees. EPFO has filed an appeal before the Supreme Court.
The EPFO taking stand that option cannot be extended to the employees of exempted trusts under the Act. The stand of the EPFO is bad and will not stand the test of Law. The larger organisations with high manpower strength were given the permission by the EPFO to manage their PF fund (excluding pension amount) through a trust. The trust is periodically monitored and controlled by the EPFO.
About 50 lakhs employees of expemted trusts are awaiting a favorable verdict from Hon'ble Supreme Court.