By Abhijit Roy
The Supreme Court�s recent judgment has cleared the way for a substantial increase in the pensions of private sector employees. Go away some practical difficulties; it will benefit millions of workers in the private sector. Presently there is no comparison between the government and private sector employees’ pension. Private sector workers, who get a lot of salaries, get a nominal pension only. On last Monday, the Apex Court rejected the petition of the Employees Provident Fund Organization, which they had against the Kerala High Court’s decision. The Kerala High Court had ordered all the retired employees to pay pension according to their full salary, while the EPFO now decides the pension on the basis of the basic salary limit of Rs. 15,000. After this order of the Supreme Court, the pension of private employees will be calculated on the basis of full pay. After the introduction of new economics in the country, concerns related to economic security of private sector employees came to light, although the government has always been confused about it. In 1995, it started an EPS (Employment Pension Scheme) for those working in the organized sector, in which the company had to deposit 8.33 percent of the basic salary of the employee. Later it was reduced to 8.33% of 6,500 rupees. After which, the changes were also made in the rule so that the employees can directly deposit their share in the pension fund with the mutual consent of the company. Again an amendment made in the EPS Act in 2014 increased the threshold limit to 8.33 percent of the maximum Rs. 15,000. It was also decided that those who want a pension on full salary, their pensionable wage will be considered as per the average monthly salary of five years. Earlier, the rule was that the pension will be decided based on the average monthly salary of one year. The Kerala High Court banned this amendment on September 1, 2014. It made the basis for fixing the pension amount again for one year’s average monthly salary. About two years later the Supreme Court asked the EPFO ??to accept the application of demand for employees’ pension on the whole salary. Further the Supreme Court decision could only be implemented, if the employees were persuaded to put a portion of their salary to the provident fund in the pension fund, the maximum pension amount would be increased from existing Rs. 5180 to Rs. 50,000 per month. But the fact here is that the employees will agree to this change only when the central government takes the guarantee of further implicating it.
