Highlights of Supreme Court judgment dated 4.11.2022 on Employees Pension Scheme 1995:
1. Validity of EPS 1995 as amended in 2014 is upheld.
2. Employees who could not opt to join the scheme can do so within the next 4 months.
3. Provision in the scheme for additional contribution by employees at 1.16% of salary in excess of Rs.15,000 per month is invalid as there is no such provision in the PF Act. However, this part of the order is suspended for 6 months to enable the government to make a suitable amendment in the Act.
4. Employees retired before 1.9.2014 will get benefits extended before the amendment. If they have not given the option for a higher salary yet, they cannot give the option now.
5. Exempted establishments will also get the benefit of the judgment.
6. Provision regarding the consideration of the last 5 years' salary instead of the last 12 months' salary for the purpose of calculating pension is upheld.
7. Fixation of the threshold of the maximum salary of Rs.15,000 per month for the purpose of calculating pension is also upheld.
8. If the salary of a person who is yet to join service exceeds Rs.15,000, they cannot join the scheme.
9. Those who are currently in service should be in a position to opt for a higher pension.
EPFO is likely to amend the scheme based on the Supreme Court order and issue a circular giving various clarifications and procedural aspects.
1. Validity of EPS 1995 as amended in 2014 is upheld.
2. Employees who could not opt to join the scheme can do so within the next 4 months.
3. Provision in the scheme for additional contribution by employees at 1.16% of salary in excess of Rs.15,000 per month is invalid as there is no such provision in the PF Act. However, this part of the order is suspended for 6 months to enable the government to make a suitable amendment in the Act.
4. Employees retired before 1.9.2014 will get benefits extended before the amendment. If they have not given the option for a higher salary yet, they cannot give the option now.
5. Exempted establishments will also get the benefit of the judgment.
6. Provision regarding the consideration of the last 5 years' salary instead of the last 12 months' salary for the purpose of calculating pension is upheld.
7. Fixation of the threshold of the maximum salary of Rs.15,000 per month for the purpose of calculating pension is also upheld.
8. If the salary of a person who is yet to join service exceeds Rs.15,000, they cannot join the scheme.
9. Those who are currently in service should be in a position to opt for a higher pension.
EPFO is likely to amend the scheme based on the Supreme Court order and issue a circular giving various clarifications and procedural aspects.
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