InvestorQ : What does the increasing of cap on pension calculated mean for pensioners?
Anjali Desai made post

What does the increasing of cap on pension calculated mean for pensioners?

Answer
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simran Kaur answered.
1 year ago


The Supreme Court has dismissed the Special Leave Petition that was filed against a Kerala High Court Judgment setting aside Employee's Pension (Amendment) Scheme, 2014 that capped maximum pensionable salary to Rs. 15,000 per month.

What this essentially means is that the pension to all private sector employees is set to rise.

The High Court had asked the EPFO to give pension to all retiring employees on the basis of their full salaries, instead of capping the figure on which the pension amount is calculated at a maximum of Rs 15,000 per month.

This means that now that the cap of Rs. 15,000 has been removed, the EPS contributions will be calculated based at 8.33% of the actual salary of the employee. Please note, though the increase in the pension is expected to come at the cost of decrease in net EPF corpus of the employee.