EPFO PENSION SCHEME

  • The Supreme Court on Friday upheld the Employees’ Pension (Amendment) Scheme, 2014 of the Employees’ Provident Fund Organistion as “legal and valid” while reading down certain provisions.
  • Most important, the court used its extraordinary powers under Article 142 of the Constitution to allow eligible employees who had not opted for enhanced pension coverage prior to the 2014 amendments, to jointly do so with their employers within the next four months.
  • The court struck down a requirement in the 2014 amendments that employees who go beyond the salary threshold (of ₹15,000 per month) should contribute monthly to the pension scheme at the rate of 1.16% of their salary.
  • The requirement to contribute 1.16% of the salary to the extent that such salary exceeds ₹15,000 per month as an additional contribution made under the amendment scheme is held to be ultra vires to the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, a three-judge Bench led by Chief Justice U.U. Lalit held.
  • The court suspended the implementation of this part for six months. 

EPFO

Employees’ Provident Fund Organisation (EPFO) was established by an act of Parliament of India, to provide social security to workers working in India. It came into force by Employee Provident Fund and Miscellaneous Provision Act, 1952. EPFO comes under the control of the Ministry of Labour and Employment, Government of India.

There are 3 major schemes of EPFO

  1. EPFO Scheme 1952
  • Accumulation plus interest upon retirement and death
  • Partial withdrawals allowed for education, marriage, illness and house construction
  • Housing scheme for EPFO members to achieve the Prime Minister’s vision of Housing for all by 2022.
  1. Pension Scheme 1995 (EPS)
  • The monthly benefit for superannuation/benefit, disability, survivor, widow(er) and children
  • Minimum pension of disablement
  • Past service benefit to participants of the erstwhile Family Pension Scheme, 1971.
  1. Insurance Scheme 1976 (EDLI)
  • The benefit provided in case of the death of an employee who was a member of the scheme at the time of death.
  • Benefit amount 20 times the wages, maximum benefit of 6 Lakh.
  • EPFO is the largest social security organization in the world in terms of the number of covered beneficiaries and the largest in terms of the volume of financial transactions undertaken. On 1st October 2014, Prime Minister launched Universal Account Number for Employees covered by EPFO to enable PF number portability.

Organization Structure of EPFO

  • Central Board of Trustees administers the EPFO. Central Board and Executive Committee are part of the Trustees Board.
  • Both the Central Board and Executive Committee have a chairman. There is a vice-chairman on the central board while the central PF commissioner on the Executive Committee.
  • Both of them are represented by the central government, state government, employees and employers’ representatives (Numbers vary.)

SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB

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