On Friday, the Supreme Court declared the Employees’ Pension (Amendment) Scheme, 2014 of the Employees’ Provident Fund Organisation to be ‘legal and valid’ after reading specific regulations.
Supreme Court Says All Employees Can Opt For EPFO Pension Scheme
After ruling Employees Pension Scheme 2014 as Legal and Valid, the Apex court further exercised its powers, under Article 142 of the Constitution, and granted permission to eligible employees to opt for the EPFO pension scheme. Those who have not opted for this pension cover before the 2014 amendments can do so.
SC also penned down one more requirement in the 2014 amendments, that all the salaried who earn more than ₹15,000 monthly are requested to make a monthly contribution of 1.16 percent of their salary towards the pension scheme.
“The requirement to contribute 1.16% of the salary to the extent that such salary exceeds ₹15,000 per month as an additional contribution made under the amendment scheme is held to be ultra vires to the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, a three-judge Bench led by Chief Justice U.U. Lalit held.”
Presently the court has suspended the effectiveness of this part for six months.
“We suspended the operation of this part of our order for six months. We do so to enable the authorities to make adjustments in the scheme so that the additional contribution can be generated from other legitimate sources within the scope of the Act, which could include enhancing the rate of contribution of the employers”, reads the judgment.
“The amendments to the pension scheme notified in August 2014 would apply to the employees of “exempted establishments” in the list of the EPFO, which number over 1,300 companies and entities”, the court further rules.
Before The Amendments In Effects
Prior to the introduction of the amendments, every employee, “who became a member of the Employees Provident Fund Scheme of 1952 as on November 16, 1995, could avail of the EPS. In the pre-amended version of EPS-1995, the maximum pensionable salary was ₹6,500. However, members whose salaries exceeded this cap could also opt, along with their employers, to contribute up to 8.33% of their actual salaries to the pension fund”, mentioned the Hindu.