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  • Category: Miscellaneous

    EPFO takes a stand before Supreme Court - Exempted trusts are not eligible for higher pension

    As 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.
  • #663419
    EPFO manages the provident fund of the employees of an organisation. There are many organisations including some public sector organisation which are exempted by EPFO in the sense that they can manage their own PF schemes but EPFO will check it for statutory and regulatory reasons. There are more than 1500 exempted organisations in our country.

    Now EPFO is differentiating between these two types of organisations - normal one and exempted one. As per the recent high court order, EPFO is supposed to give increased pension to the EPFO subscribers. Now EPFO is bringing some other finer points in the legislation and has approached the supreme court and wants that court should also agree for that differentiation so that the EPFO's load for increased pension might come down.

    Let us see the verdict of the court in this matter. We hope court will give a favourable verdict in favour of the employees so that all of them get increased pension whether it is an exempted or normal organisation.

    Knowledge is power.


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