Pensions of EPFO subscribers likely to rise by 10 times
New Delhi: With the recent ruling of the Supreme Court over hike in pension of crores of private sector employees, hopes are high that the pensions of the Employees’ Provident Fund Organisation (EPFO) members may rise by about 10 times.
However, the hike can be materialised only if EPFO gives nod to extend the additional pension benefit to all the employees. The SC in a case filed by a private sector employee had ruled in 2016 that pension of the filing parties under EPF should be revised as per the amendment done in 1996 by EPFO, The Financial Express reported.
Following the ruling of the SC, the pension of 12 petitioners under the employee pension scheme (EPS) increased by about 10 times. So, it can be expected that the pension of all the employees will also be increased. In case the EPFO decides to go against hiking pension of other employees, more petitions are sure to be filed.
The pension scheme, which is part of EPF, has more than 5 crore subscribers. Every employee in the organised sector contributes 12% of basic salary and dearness allowance. The employer or the organisation makes a matching contribution. Of the employer’s contribution, 8.33% goes to the EPS. When people withdraw their EPF after a job switch or during unemployment, the EPS is not given out. It is paid only after superannuation.
Meanwhile, there is a ceiling on EPS contributions. The current limit on salary (basic + DA) is Rs 15,000 per month; which means, the maximum contribute an employee can make to the EPS is 8.33% of Rs 15,000, which is Rs 1,250 per month.
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