EPFO Pension: Your Provident Fund (PF) structure may change soon - Here is why
EPFO Pension latest news: The Employees' Provident Fund Organisation (EPFO) members will be waiting anxiously for Monday January 18th as the Supreme Court will be delivering important verdict in regard to the EPFO Pension.
EPFO Pension latest news: The Employees' Provident Fund Organisation (EPFO) members will be waiting anxiously for Monday January 18th as the Supreme Court will be delivering important verdict in regard to the EPFO Pension. EPFO pensioners and subscripers are of the opinion that the Apex Court verdict will end their long wait for pension according to salary.
The Supreme Court of India will hear the EPFO review petition after 21 months on the appeal filed by the Ministry of Labor & Employment against the decision of the highest Indian court. A three judges bench headed by Justice U Lalit will consider the petitions tomorrow i.e. 18th January. Earlier Kerala High Court and the Supreme Court have ruled in favour of the EPFO Pensioners.
The Supreme Court on 1st April 2019 upheld the Kerala High Court's decision on the monthly pension of the Employees Pension Scheme (EPS). The Labor Ministry then filed an appeal against the decision of the High Court despite a review petition filed by the EPFO. On 12th July 2019, a bench headed by the then Chief Justice Ranjan Gogoi ordered hearing of both the petitions. However, no further action was taken in this regard. The Parliamentary Standing Committee, meanwhile, sought clarification in the matter in October 2019.
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If the Supreme Court further upholds its decision, the EPFO structure may undergo a drastic change because the Supreme Court review is in regard to the PF account of the EPFO subscribers. In this regard, senior officials of the Labor Ministry have given some suggestions in this regard to the Cabinet Committee. These officials were of the view that in order to continue the EPFO and make the funds more relevant, structural changes need to be made. The EPFO has over 23 lakh pensioners, who receive a pension of Rs 1,000 every month. While their contribution to PF is less than a quarter of it. Officials said that if this continues, it will be difficult to manage in future. This is why 'defined contribution' should be adopted to make it more relevant.
Currently, the maximum limit for EPFO pension has been fixed. On availing 'defined contribution', the members of EPF will be given benefit as per their contribution means their contribution will be directly proportional to the contribution.
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