NEW DELHI: A day after extending the deadline for submitting the joint option for higher pension till June 26, the labour ministry has said the employer’s contribution for members who sign up for higher pension and are found eligible for it will be 9.49%, up from the existing 8.33%.
Since the notification comes into retrospective effect from September 1, 2014, the cut-off date for the SC ruling in this regard, this means that the additional 1.16% contribution from the employers’ 12% contribution into PF will be drawn retrospectively from the employees’ PF corpus. This will mean a depletion of a subscriber’s PF kitty when added to the arrears one if you opt for higher pension.
In a notification on Wednesday, the ministry said this has been done in compliance with the November 4, 2022 judgment of the SC, which had suspended a decision on the replacement mechanism for the 1.16% contribution for six months and directed the authorities to make the necessary adjustments to the pension scheme.
The ministry also said the existing Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 now stands subsumed within the Code on Social Security, 2020, and that the government has decided to invoke the provisions of the code in relation to the SC’s judgment.
“…to comply with the said directions of the Hon’ble Supreme Court and since the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) has been subsumed in the Code on Social Security, 2020 (36 of 2020), the Central Government has decided to bring into force the relevant provisions of the said Code,” the notification said.
Invoking the provisions of the Social Security Code, 2020, the notification said, “…in respect of members who have exercised joint option for contributing under the provisions of paragraph 11 of the Employees’ Pension Scheme, 1995 and who are found eligible, the employer’s contribution shall be 9.49% of the basic wages, dearness allowance and retaining allowance of each member by increasing 1.16% from the extant 8.33%.” The notification, which comes into effect retrospectively from September 1, 2014, added that the increased contribution will apply to employees whose basic wages, DA and retaining allowance exceed Rs 15,000.
Since the notification comes into retrospective effect from September 1, 2014, the cut-off date for the SC ruling in this regard, this means that the additional 1.16% contribution from the employers’ 12% contribution into PF will be drawn retrospectively from the employees’ PF corpus. This will mean a depletion of a subscriber’s PF kitty when added to the arrears one if you opt for higher pension.
In a notification on Wednesday, the ministry said this has been done in compliance with the November 4, 2022 judgment of the SC, which had suspended a decision on the replacement mechanism for the 1.16% contribution for six months and directed the authorities to make the necessary adjustments to the pension scheme.
The ministry also said the existing Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 now stands subsumed within the Code on Social Security, 2020, and that the government has decided to invoke the provisions of the code in relation to the SC’s judgment.
“…to comply with the said directions of the Hon’ble Supreme Court and since the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) has been subsumed in the Code on Social Security, 2020 (36 of 2020), the Central Government has decided to bring into force the relevant provisions of the said Code,” the notification said.
Invoking the provisions of the Social Security Code, 2020, the notification said, “…in respect of members who have exercised joint option for contributing under the provisions of paragraph 11 of the Employees’ Pension Scheme, 1995 and who are found eligible, the employer’s contribution shall be 9.49% of the basic wages, dearness allowance and retaining allowance of each member by increasing 1.16% from the extant 8.33%.” The notification, which comes into effect retrospectively from September 1, 2014, added that the increased contribution will apply to employees whose basic wages, DA and retaining allowance exceed Rs 15,000.
