Source | https://economictimes.indiatimes.com : By Prabhakar Sinha
NEW DELHI: The Employees’ Provident Fund Organisation’s (EPFO) stand refusing pension on full salary to employees of Exempt Companies despite a Supreme Court order on October 4, 2016, to do so is likely to attract strong opposition from members of the Central Board of Trustee (CBT) of the PF body in its meeting on Thursday.
Those companies, whose employees’ fund is managed by private trusts are called Exempt Organisations and whose fund is managed by the EPFO’s trust are Un-Exempt ones. After the SC order, the EPFO agreed to give pension on full salary to the members of Employees’ Pension Scheme (EPS) without specifying whether they were from Exempt or Un-Exempt organisations with retrospective effect. But later, it decided to give it to employees’ of Un-Exempt Organisations only.
At present, the EPFO accepts contribution to EPS at 8.33% of salary with a ceiling at Rs 15,000 only and the pension is also given on the basis of Rs 15,000 per month. The ceiling was earlier at Rs 6,500. If the contribution is accepted on full salary, pension will also be given on the full average monthly salary at the time of retirement. Pension payout on full salary is many times more than that calculated on the basis of the ceiling amount.
The EPFO, so far, has refused to accept contribution on full salary, saying that employees and employers should have taken permission from it within 6 months of salary crossing the given ceiling.
The SC had directed the EPFO to do away with the cap of 6 months to accept consent to contribute to EPS on full salary. In fact, two of the 12 petitioners who won the case in SC were from an Exempt Company. CBT member and INTUC office bearer Ramen Pandey said the EPFO got cold feet to give pension on full salary to the employees of Exempt Organisations after accepting it and issuing a circular on March 23 this year to give pension to all the employees on full salary. A number of board members were also critical of the EPFO’s move in denying a higher pension to all EPS members.