Attention EPFO Subscribers! Good News On Monthly Pension Via EPS
Here’s is a good news for subscribers of the Employee’s Provident Fund Organisation (EPFO) under Employee Pension Scheme (EPS). Once can now increase his/her monthly pension amount following the Supreme Court’s order in April this year which upheld a Kerala High Court verdict on monthly pension from the Employees’ Pension Scheme 95 (EPS 95).
Earlier, the Kerala high court had asked the EPFO to give full pension to EPS subscribers while scrapping a 2014 notification of the pension body.
As per the verdict, EPFO subscribers will get pension on basis of their full last drawn salaries.
Usually a part of the employer’s contribution towards EPF is put in the EPS as mentioned in the EPFO rules. A subscriber’s pension depends on the number of years of his/her service and last drawn salary.
Following the Supreme Court’s ruling, the EPFO will provide pension to private sector employees in proportion to their full salary. Earlier, EPFO was providing pension to these employees calculated on their salary with a maximum cap at Rs 15,000.
Now that the SC ruling has removed the Rs 15,000 norm, the EPS contributions will be calculated based at 8.33% of the actual salary of the employee.
However, the increase in the pension will result in decrease in the net EPF corpus of the private employees.
As per the new calculation, Monthly pension = Total years of job x last drawn salary/70.
However, to get a higher pension, an EPFO subscriber can apply via the employer to the pension fund organisation to deduct a sum retrospectively equal to 8.33% of basic + DA towards EPS.