In a major relief to many employees, the Supreme Court has dismissed the Special Leave Petition filed against a Kerala High Court judgment setting aside the Employee's Pension (Amendment) Scheme, 2014, which capped the maximum pensionable salary at Rs. 15,000 per month. The bench comprising the CJI Ranjan Gogoi, Justice Deepak Gupta, and Justice Sanjiv Khanna summarily dismissed the SLP filed by the Employees Provident Fund Organisation, observing that it does not find any merit in it. The Kerala High Court, in October last year, had allowed the writ petitions filed by employees of various establishments covered by the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Their grievance was with the changes brought about by the Employee's Pension (Amendment) Scheme, 2014, which drastically reduces the pension payable to them.
From India, Pune
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3251From India, Pune
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Dear Nath Rao,
Thank you for sharing. I also read the news in dailies. I do not have complete information on the implications regarding who, when, and how much. Particularly, how the EPFO is going to address the challenges in meeting the additional financial implications. It is certain that thousands of employees will benefit, especially those whose EPS contribution was affected by the capping issue, which is the essence of the Supreme Court judgment. It will be interesting to observe the course of action the EPFO takes in implementing the judgment. Please keep me updated on developments in this matter.
Kind regards, [Your Name]
From India, Bangalore
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Thank you for sharing. I also read the news in dailies. I do not have complete information on the implications regarding who, when, and how much. Particularly, how the EPFO is going to address the challenges in meeting the additional financial implications. It is certain that thousands of employees will benefit, especially those whose EPS contribution was affected by the capping issue, which is the essence of the Supreme Court judgment. It will be interesting to observe the course of action the EPFO takes in implementing the judgment. Please keep me updated on developments in this matter.
Kind regards, [Your Name]
From India, Bangalore
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After this whether employees whose salary is above 15000 has to make contribution of 12% of his actual salary????
From India, Kochi
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From India, Kochi
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Hi Vinod,
Your doubt is reasonable. However, I think we should await the full text of the judgment to answer this query. Even the EPFO website has not been updated with this judgment so far. Presumably, it's unlikely to imply such a major decision of a 12% contribution on full 'salary' without capping it at Rs. 15000/- as you asked. The subject matter dealt with is allocating the contribution to the EPS account without limiting it to Rs. 6500/15000. I feel it may not involve or impact the contribution to the EPF account itself. Let us await the full text, which may be available in a couple of days, and study the implications carefully. I have no clue about any review petition on this judgment to my knowledge. Members, please share the full text of the SC judgment if you have it.
Now I have access to the SC order (attached). But we should read it along with the contents of the Kerala HC judgment to have a clear idea of the implications. Please find attached the text of the Kerala HC judgment dated 12.10.2018, which should be read in the context. Since the SC upheld the verdict of the Kerala HC, we, for all practical purposes, should properly understand and follow the contents of the Kerala HC as it disposed of hundreds of pleas relevant to the issue. Additionally, since there is an element of EPFO's Notification in the whole case, it's prudent to await the follow-up action of the EPFO, if any (which is still not known) in this regard.
From India, Bangalore
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Your doubt is reasonable. However, I think we should await the full text of the judgment to answer this query. Even the EPFO website has not been updated with this judgment so far. Presumably, it's unlikely to imply such a major decision of a 12% contribution on full 'salary' without capping it at Rs. 15000/- as you asked. The subject matter dealt with is allocating the contribution to the EPS account without limiting it to Rs. 6500/15000. I feel it may not involve or impact the contribution to the EPF account itself. Let us await the full text, which may be available in a couple of days, and study the implications carefully. I have no clue about any review petition on this judgment to my knowledge. Members, please share the full text of the SC judgment if you have it.
Now I have access to the SC order (attached). But we should read it along with the contents of the Kerala HC judgment to have a clear idea of the implications. Please find attached the text of the Kerala HC judgment dated 12.10.2018, which should be read in the context. Since the SC upheld the verdict of the Kerala HC, we, for all practical purposes, should properly understand and follow the contents of the Kerala HC as it disposed of hundreds of pleas relevant to the issue. Additionally, since there is an element of EPFO's Notification in the whole case, it's prudent to await the follow-up action of the EPFO, if any (which is still not known) in this regard.
From India, Bangalore
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Dear Kumar Sir, Word file Doc pertaining to SC Judgment on EPF Pension 31.03.19 is enable kindly resend it with disable to view. Regards,
From India, Andheri
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From India, Andheri
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Hi,
I have a few queries. Please help me with this:
1. Is conveyance allowance part of CTC?
2. Is PF calculated on 12% of Basic + Special Allowance?
3. If Basic is less than 15k and Basic + Special Allowance is greater than 15k, can we take PF as 12% of 15K?
4. Is EPS calculated on only Basic or Basic + Special Allowance?
5. For example: Basic - 8400, SA - 7690, PF (Employee contribution - 1800) and (Employer contribution - EPF - 590 and EPS - 1340, so total 1930). Is this correct?
Kindly help me.
Thank you,
Savita
From India, Bengaluru
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I have a few queries. Please help me with this:
1. Is conveyance allowance part of CTC?
2. Is PF calculated on 12% of Basic + Special Allowance?
3. If Basic is less than 15k and Basic + Special Allowance is greater than 15k, can we take PF as 12% of 15K?
4. Is EPS calculated on only Basic or Basic + Special Allowance?
5. For example: Basic - 8400, SA - 7690, PF (Employee contribution - 1800) and (Employer contribution - EPF - 590 and EPS - 1340, so total 1930). Is this correct?
Kindly help me.
Thank you,
Savita
From India, Bengaluru
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Hi Savita,
For most of your queries, you ticked right:
"I have a few queries. Please help me with this.
1. Is conveyance allowance part of CTC? (Yes)
2. Is PF calculated on 12% of Basic + Special Allowance? (Yes)
3. If Basic is less than 15k and Basic + Special Allowance is greater than 15k, can we take PF as 12% of 15K? (Yes)
4. EPS is calculated on only Basic or Basic + Special Allowance? (Yes, no change to computation for EPS. But how, please see here:
= EPS is nothing but part of contributions to EPF recovered from employees, and matching contribution from employers is clubbed. As you know, contributions are made @ 12% each by employees concerned and their employers. While employees' 12% in full goes to EPF account (UAN) directly, the other part - equivalent employers' contribution is bifurcated into two, one @ 8.33% is sent to EPS account of employees & the balance of 3.67% is diverted/deposited into employees' EPF account as the employers' contribution.
5. For example: Basic - 8400, SA - 7690 PF (Employee contribution - 1800) and (Employer contribution - EPF - 590 and EPS - 1340 so total 1930). Is this correct?
= Employees' contribution as well as the employer's contribution are limited to the maximum salary of Rs. 15,000 only. While employees are free to contribute more voluntarily, the employer's liability is limited to only Rs. 15,000. However, the percentage shall remain at 12% thereafter.
Also, please read the attached notes for general information on this.
From India, Bangalore
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For most of your queries, you ticked right:
"I have a few queries. Please help me with this.
1. Is conveyance allowance part of CTC? (Yes)
2. Is PF calculated on 12% of Basic + Special Allowance? (Yes)
3. If Basic is less than 15k and Basic + Special Allowance is greater than 15k, can we take PF as 12% of 15K? (Yes)
4. EPS is calculated on only Basic or Basic + Special Allowance? (Yes, no change to computation for EPS. But how, please see here:
= EPS is nothing but part of contributions to EPF recovered from employees, and matching contribution from employers is clubbed. As you know, contributions are made @ 12% each by employees concerned and their employers. While employees' 12% in full goes to EPF account (UAN) directly, the other part - equivalent employers' contribution is bifurcated into two, one @ 8.33% is sent to EPS account of employees & the balance of 3.67% is diverted/deposited into employees' EPF account as the employers' contribution.
5. For example: Basic - 8400, SA - 7690 PF (Employee contribution - 1800) and (Employer contribution - EPF - 590 and EPS - 1340 so total 1930). Is this correct?
= Employees' contribution as well as the employer's contribution are limited to the maximum salary of Rs. 15,000 only. While employees are free to contribute more voluntarily, the employer's liability is limited to only Rs. 15,000. However, the percentage shall remain at 12% thereafter.
Also, please read the attached notes for general information on this.
From India, Bangalore
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Hello Sir, Thank you very much sir for clarifying the doubts. It was very helpful. Can performance bonus can be given every month?
From India, Bengaluru
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From India, Bengaluru
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Dear friends,
You can download the SC order dated 1.4.2019 on the appeal of EPFO regarding the Kerala HC judgment on EPS on full salary from this link: https://www.livelaw.in/top-stories/e...reduced-143999.
If it's not opening, you should try to open it through Google. If you are unable to save a copy, you can print the attached order and use it as your reference. A typed version in Word is also attached.
Thank you.
From India, Bangalore
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You can download the SC order dated 1.4.2019 on the appeal of EPFO regarding the Kerala HC judgment on EPS on full salary from this link: https://www.livelaw.in/top-stories/e...reduced-143999.
If it's not opening, you should try to open it through Google. If you are unable to save a copy, you can print the attached order and use it as your reference. A typed version in Word is also attached.
Thank you.
From India, Bangalore
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Hi Savita,
As the nomenclature itself suggests, "Performance Bonus/incentives" are meant to reward the employees when their performances either accomplish the targets or exceed the 'benchmark' fixed for the purposes computed in accordance with the approved formula/procedure. This will apply to both production staff as well as other admin/supervisory staff. The periodicity for qualifying for the grant of 'bonus/incentive' will vary depending on the target period/threshold limits earmarked. If the beneficiary performance exceeds the par/limits fixed, every month, they can be paid every month. Sometimes, admin./supervisory staff will be fixed a minimum to be paid irrespective of the quantum thus exceeded every month, whereas production/utilities staff's bonus is always linked to the quantum of productivity/production, and therefore their upper limit is bound to vary, in which case a maximum ceiling can be fixed. This again depends on the policy of the organization. The danger of fixing a max limit will result in production staff limiting their outputs once they qualify for the maximum, and if this happens, it becomes a 'disincentive' in a way.
Sometimes when the performance is linked to a project, like construction/fabrication/erection, etc., it may be difficult to work out performance-linked bonus/incentives. In such cases, a monthly allowance or a fixed incentive may be paid, adjustable by the end of project completion. In some cases, a lump sum 'bonus' for a team of workmen may be paid, leaving the sharing methods to the head/lead of the team who are empowered to decide considering the actual performance of person(s) involved in execution.
Therefore, a scheme commensurate with the nature of duty, productivity, costs, etc., has to be drafted. If it's a unionized unit, concurrence of the recognized Union may also be necessary to implement the scheme.
From India, Bangalore
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As the nomenclature itself suggests, "Performance Bonus/incentives" are meant to reward the employees when their performances either accomplish the targets or exceed the 'benchmark' fixed for the purposes computed in accordance with the approved formula/procedure. This will apply to both production staff as well as other admin/supervisory staff. The periodicity for qualifying for the grant of 'bonus/incentive' will vary depending on the target period/threshold limits earmarked. If the beneficiary performance exceeds the par/limits fixed, every month, they can be paid every month. Sometimes, admin./supervisory staff will be fixed a minimum to be paid irrespective of the quantum thus exceeded every month, whereas production/utilities staff's bonus is always linked to the quantum of productivity/production, and therefore their upper limit is bound to vary, in which case a maximum ceiling can be fixed. This again depends on the policy of the organization. The danger of fixing a max limit will result in production staff limiting their outputs once they qualify for the maximum, and if this happens, it becomes a 'disincentive' in a way.
Sometimes when the performance is linked to a project, like construction/fabrication/erection, etc., it may be difficult to work out performance-linked bonus/incentives. In such cases, a monthly allowance or a fixed incentive may be paid, adjustable by the end of project completion. In some cases, a lump sum 'bonus' for a team of workmen may be paid, leaving the sharing methods to the head/lead of the team who are empowered to decide considering the actual performance of person(s) involved in execution.
Therefore, a scheme commensurate with the nature of duty, productivity, costs, etc., has to be drafted. If it's a unionized unit, concurrence of the recognized Union may also be necessary to implement the scheme.
From India, Bangalore
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