The Supreme Court has controlled that associates of the Employee’s Provident Fund Organization (EPFO) who are part of Employee’s Pension Scheme can invest more in the direction of pension, on condition that they encounter definite conditions.
This has set to repose certain years of lack of certainty increasing from Judgements given by money high courts that repealed an EPFO of August 22, 2014 in this consideration. The latest Supreme Court judgement dated November 4, 2022 that says:-
1. Anyone who enlisted the Employee’s Provident Fund (EPF) scheme on or after September 1, 2014 are not eligible to continue the Employees’ Pension Scheme (EPS) if their primary remuneration or earnings is more than Rs 15,000 per month.
2. The maximum pensionable earnings for the motive of considering the pension is still Rs 15,000 per month as per the notification given by the EPFO in 2014. This implies that even if primary earnings is more than Rs 15,000 the employee’s handout to pension will carry on with to be calculated on a primary salary of Rs 15,000.
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Sanjeev Kumar, Luthra & Luthra Law offices India, says the adjudication has finally laid to relax a blazing matter concerning the modification purposed to the Employees’ Pension Amendment of 2014 while endorsing most of the EPFO’s 2014 proclamation and of greatest importance views of the Rajasthan, Kerala and Delhi high courts, the Supreme Court has provided a one- time consolation or comfort to several employees.
The decision has provided a one- time comfort to employees who were associates of the EPS as on September 1, 2014 and had been giving a higher investment to the EPS – i.e., investment on their exact salary if it was more than Rs 15,000 per month.
These employees are now need to submit a Joint declaration accompanied by their employer, to the EPFO in order to carry on with making handouts or contributions on the above amount. This declaration has to be submitted with a time period of four months from the day of the Judgement (November 4, 2022), this means on or before 4 March, 2023.
For employees giving this declaration, their pension will be considered on their higher earnings and not at the restricted Rs 15,000 each month.
According to the Supreme Court conclusion EPS members as on September 1, 2014 who went for higher investments at that time to their account will still be needed to make supplementary investments of 1.16 % on the extra amount. For example, if an employee who was a EPS associate as on September 1, 2014, and has income of Rs 20,000 per month. In this situation, EPS investments will be calculated as 8.33 percent of Rs 15,000+ 1.16 percent of Rs 5,000 (Rs 20,000- Rs 15,000), as per the plan described in the 2014 EPFO Notification.
