The Supreme Court on Monday dismissed the Special Leave Petition (SLP) filed against a Kerala High Court order that had asked Employees Provident Fund Organisation (EPFO) to provide pension to all private sector retiring employees on the basis of their full salary, a media report said.
The EPFO caps the figure on which contribution is calculated at a maximum of Rs 15,000 per month.
"We find no merit in the special leave petition. The same is, accordingly, dismissed,'' the apex court was quoted as saying by The Times of India.
The employer’s component is split into EPF (3.67 percent) and the Employees’ Pension Scheme (8.33 percent).
According to the newspaper report, while the pension of the employees will increase, the provident fund corpus will be reduced as the extra contribution will now go to the Employees Pension Scheme rather than PF.
Following the supreme court judgement, all private sector employees will now get a pension on their full salary instead of the Rs 15,000 cap after their retirement.
The EPS was introduced by the government in 1995 for the organised sector employees.
In March, the Supreme Court's (SC) had said that employers can't segregate special allowances from basic salary. It needs to be included for PF deductions under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, a bench of Justices Arun Mishra and Naveen Sinha had said.
The Supreme Court held that variable earning which may vary from individual to individual according to their efficiency and diligence would stand excluded from the term “Basic Wages” under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (Provident Fund Act).
With inputs from agencies
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Updated Date: Apr 03, 2019 12:05:51 IST