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Supreme Court Judgment of Higher Pension

The Supreme Court has ruled in favor of thousands of eligible employees who have been litigating for years seeking to increase their pension benefits under the Employees' Pension Scheme-1995 (EPS-1995) of the Employees' Provident Fund Organization (EPFO). The EPS-95 offers pension on retirement, disablement, pension to widows, and pension for nominees. The contribution to EPS 95 is currently based on a capped salary of Rs. 15,000 per month, and the contribution on which comes to Rs. 1,250 (i.e., 8.33% * 15,000). However, with effect from 16.03.1996, a provision was added to paragraph 11(3) of the scheme giving an option to the employer and employee for contribution on salary exceeding the capped salary to reap a higher pension on retirement. This provision was deleted in August 2014, nullifying the choice of an employee to contribute to EPS on higher/uncapped salary and subsequently earn a higher pension.

Earlier judgments of the Kerala High Court and the Delhi High Court moved towards restoring the option of higher/uncapped pension, and a review petition was also heard by the Supreme Court. Finally, on November 4, 2022, a three-judge bench at the Supreme Court passed its judgment in the case of the Employees' Provident Funds Organization (EPFO) & ANR. etc. vs. Sunil Kumar B. & ORS etc., upholding the right of existing employees to opt for a higher pension by contributing to EPS on a higher salary. The Supreme Court has directed the EPFO to implement the directives within eight weeks.

Click Here to read the judgment

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