As per the latest ruling from the Supreme Court, the members of the Employees’ Provident Fund Organisation (EPFO) who are also the members of Employee’s Pension Scheme are eligible to contribute more to their pension but only if they meet certain conditions. This ruling denied and clarified many confusions that arose from the judgments of several high courts.
Latest Supreme Court Ruling Regarding EPS Pension Contributions
The recent judgment from the Supreme Court, ruled on November 4, 2022, has clarified the following:
A citizen who has joined the Employees’ Provident Fund (EPF) Scheme on or after September 1, 2014, cannot join the Employees’ Pension Scheme (EPS) if his or her basic pay is crossing ₹15,000 per month.
As decided in 2014, now also, the maximum salary eligible under EPS or employee’s pension scheme will still be ₹15,000 per month. This verdict states that even if a member has a basic salary of more than ₹15k, he or she will still be able to contribute towards the pension scheme and it will be calculated on basic pay of ₹15k only.
“Any individual employee who joined the EPF scheme after September 1, 2014, and became a member of the EPS (as basic salary was below Rs 15,000 at the time of joining) does not have an option of making higher contributions to the EPS. The relief is available to only individuals who were EPS members as on September 1, 2014”, mentioned economic times.
Experts on EPS Scheme Verdicts
“While the Supreme Court has provided much-needed clarity on a few fundamental aspects of the functioning of the EPS, it has also pointed out that further nitty-gritty has to be ironed out. We expect that the EPFO will issue detailed operational guidelines and FAQs based on this judgment, especially on the impact on exempted establishments and the manner in which the additional contributions can be made. One thing is clear, though, and is cause for some celebration: employees who were EPS were EPS members as on September 1, 2014, and in respect of whom contributions were made on a higher sum, will be entitled to more pension,” said Sowmya Kumar, from IndusLaw.
“The Supreme Court has carved out various parameters wherein some groups of employees are set to gain. Employees of the exempted establishments would now stand on the same footing as that employee in regular establishments. “Further, the Supreme Court, while exercising its special powers under Article 142 of the Constitution, has said even those employees who did not exercise their options under the amendment earlier, but were entitled to do so, can now apply for the option under the scheme within 4 months. While this comes as a huge relief for various employees, keeping in mind the sudden economic burden on the government, the further time has been granted to make appropriate adjustments to the scheme,” said Sanjeev Kumar, from Luthra & Luthra Law Offices India.
“The verdict has finally laid to rest a burning issue regarding the amendment brought to the Employees’ Pension Amendment of 2014. While upholding most of the EPFO’s 2014 notification and overriding the views of the Delhi, Rajasthan, and Kerala high courts, the apex court has offered a one-time relief to certain employees”, he also said.