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.
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