Respected seniors,
This is Ramu, working as DM-HR in the manufacturing industry. As per the latest judgment, which was also published in the newspapers recently, the pension contribution can exceed Rs. 15,000/-. Accordingly, all our employees are approaching us to ascertain the procedure.
My queries are:
1. From which date is it to be effective?
2. Do we have to pay any additional amount for this?
3. Do we have to give any joint declaration (Employee & Employer)?
Kindly advise me on this issue.
Ramu
From India, Vijayawada
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6This is Ramu, working as DM-HR in the manufacturing industry. As per the latest judgment, which was also published in the newspapers recently, the pension contribution can exceed Rs. 15,000/-. Accordingly, all our employees are approaching us to ascertain the procedure.
My queries are:
1. From which date is it to be effective?
2. Do we have to pay any additional amount for this?
3. Do we have to give any joint declaration (Employee & Employer)?
Kindly advise me on this issue.
Ramu
From India, Vijayawada
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Dear Ramu Sir,
This is yet to be declared. Also, in today's scenario, if someone has 20k as basic, then as an employee, they share 12%, i.e., 2400/- is contribution. However, as the employer's share first pension amount is calculated out of 12%, 8.33% of 15k, i.e., 1250/-, and the rest goes into PF, i.e., 2400-1250= 1150/-.
Now, the point is even if the slab for pension goes up, the employer has to pay the same amount. However, less employer share of PF will be deposited because more amount will go to the pension fund.
From India, Pune
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This is yet to be declared. Also, in today's scenario, if someone has 20k as basic, then as an employee, they share 12%, i.e., 2400/- is contribution. However, as the employer's share first pension amount is calculated out of 12%, 8.33% of 15k, i.e., 1250/-, and the rest goes into PF, i.e., 2400-1250= 1150/-.
Now, the point is even if the slab for pension goes up, the employer has to pay the same amount. However, less employer share of PF will be deposited because more amount will go to the pension fund.
From India, Pune
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Amendments to the PF Act and EPS'95
The PF Act has been amended from September 1, 2014, and the wage ceiling has been revised to Rs. 15,000/-. The EPS'95 has been amended to restrict the pension contribution to 8.33% of the employer's share, based on a maximum of Rs. 15,000/-, which amounts to Rs. 1,250/-.
However, with effect from September 1, 2014, wherever the employer and employees have opted to contribute on a salary exceeding INR 6,500 per month, such an employer and employee will have to exercise a fresh option (within 6 months or such an extended period by the authorities) to contribute on a salary exceeding INR 15,000 per month. This is subject to the condition that such a member would have to contribute the Central Government’s share of contribution at 1.16% on the salary exceeding INR 15,000 per month from his/her share of contribution. In case of failure, the contribution to the EPS will be limited to 8.33% of INR 15,000 per month effective September 1, 2014.
Although there were some reports circulating in WhatsApp circles suggesting that this time limit is relaxed and the contribution could be revised to the actual salary even now, there has been no such change made in the official version of EPS. Until further clarity is obtained, the provision will continue to be at Rs. 1,250/-. In case it is further relaxed, you may get to know the full details, including the date of revision.
From India, Mumbai
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The PF Act has been amended from September 1, 2014, and the wage ceiling has been revised to Rs. 15,000/-. The EPS'95 has been amended to restrict the pension contribution to 8.33% of the employer's share, based on a maximum of Rs. 15,000/-, which amounts to Rs. 1,250/-.
However, with effect from September 1, 2014, wherever the employer and employees have opted to contribute on a salary exceeding INR 6,500 per month, such an employer and employee will have to exercise a fresh option (within 6 months or such an extended period by the authorities) to contribute on a salary exceeding INR 15,000 per month. This is subject to the condition that such a member would have to contribute the Central Government’s share of contribution at 1.16% on the salary exceeding INR 15,000 per month from his/her share of contribution. In case of failure, the contribution to the EPS will be limited to 8.33% of INR 15,000 per month effective September 1, 2014.
Although there were some reports circulating in WhatsApp circles suggesting that this time limit is relaxed and the contribution could be revised to the actual salary even now, there has been no such change made in the official version of EPS. Until further clarity is obtained, the provision will continue to be at Rs. 1,250/-. In case it is further relaxed, you may get to know the full details, including the date of revision.
From India, Mumbai
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Dear sir i want to know how to calculate pension when employee retired after 58 year
From India, Indore
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From India, Indore
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EPF - Pension contribution is zero WHY.jpg
Epf circular on full salary 230317 Pension on full salary as per SC order 23.3.2017.pdf