EPS(95) higher pension option and minimum pension for unexempted and exempted estb

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Employees are contributing to the growth of nation by service and paying direct taxes at source. As part of social security, pension scheme EPS(95) is offered from EPFO under Ministry of Labour and Employment. In this scheme there is no minimum guaranteed pension amount and no option to raise the pension contribution by employee based on actual wages beyond statutory limit of 15000₹ as of date.

Pension is calculated based on pensionable salary which is limited by ceiling of 15000₹ per month, which limits the pension drawn. Eg an employee with maximum service of 35 years when retires, his pension is calculated on pensionable salary(15000₹) rather than his/her basic salary drawn at retirement.Thus limiting the maximum pension to 7500₹ per month. Now a days old age pensions by some state govts itself is around 2000₹, Where as for employees no such guarantee of minimum pension.

Employees are raising demand nation wide to have an option to contribute to pension fund on actual wages, without statutory limit, if they are willing to have higher pension. This option is there in EPS(95) act, which is repealed in EPS(amendment) act of 2014.

Legal cases filed nation wide by many employees and after a prolonged legal fight got verdict from Hon’ble Supreme Court in year 2016 upholding employees plea to exercise higher pension option.

But by quoting the EPS(amendment) act 2014 - which amended EPS(95) act to disallow higher pension option- EPFO is allowing this option only to employees who attained superannuation before year 2014.This is seriously handicapping the continuing employees who want to raise their pension contribution to get higher pension.

If the higher pension option is allowed it benefits both the employees who got retired as well as who are in service under organised sector nation wide, to raise to reasonable pension by contributing to pension fund on higher wages without ceiling.