Gist of gazette notification enhancing EPF wage ceiling
Labour & Employment Ministry vide notification dated 19th & 22nd august 2014 made certain important changes in the EPS scheme. The notifications are effective from 1st September 2014.
EPF SCHEME, 1952
1. Wage limit enhanced to Rs. 15,000 from Rs. 6500.
EPS, 1995
2. Minimum pension fixed to Rs. 1000 pm
3. Maximum pensionable salary will be Rs. 15,000 pm.
4. Pensionable salary shall be calculated on the basis of average monthly pay drawn during the contributory period of service in the span of 60 months instead of 12 months. 12 months has been replaced in the scheme mutatis mutandis.
5. Wherever employer and employee have opted to contribute on salary exceeding Rs. 6500 pm, such employer and employees will have to exercise a fresh option to contribute on salary exceeding Rs. 15000 pm. Fresh options is to be exercised with in six month.
6. In case the fresh option is not exercised, it shall be deemed that the employee has not opted in allowing contribution over wage ceiling and the contributions to employees’ Pension fund made above the wage ceiling in respect of member shall be diverted to the provident fund account of the member.
7. Where the employer and employee has opted to contribute over Rs. 15000, the government share of contribution @ 1.16% on the salary exceeding Rs. 15000 pm will be deducted from employees contribution.
8. Provision for contribution on higher salary is withdrawn i.e. above Rs. 15000. Hence no new option can be allowed to any new employee becoming member on or after 1st September, 2014 for deduction towards pension fund on wage exceeding Rs. 15000.
9. EPS will henceforth apply only to EPF members whose pay at time of becoming member is not more than Rs. 15000. The entire contribution of employer and employee shall remain in PF account and no diversion to EPS shall be made for all new PF members having salary more than 15,000 at the time of joining.
EDLI Scheme, 1976
10. The benefit under the scheme shall be further increased by 20 percent in addition to the benefit admissible under sub-paragraph (1), (2) or (3) of paragraph 22.
Labour & Employment Ministry vide notification dated 19th & 22nd august 2014 made certain important changes in the EPS scheme. The notifications are effective from 1st September 2014.
EPF SCHEME, 1952
1. Wage limit enhanced to Rs. 15,000 from Rs. 6500.
EPS, 1995
2. Minimum pension fixed to Rs. 1000 pm
3. Maximum pensionable salary will be Rs. 15,000 pm.
4. Pensionable salary shall be calculated on the basis of average monthly pay drawn during the contributory period of service in the span of 60 months instead of 12 months. 12 months has been replaced in the scheme mutatis mutandis.
5. Wherever employer and employee have opted to contribute on salary exceeding Rs. 6500 pm, such employer and employees will have to exercise a fresh option to contribute on salary exceeding Rs. 15000 pm. Fresh options is to be exercised with in six month.
6. In case the fresh option is not exercised, it shall be deemed that the employee has not opted in allowing contribution over wage ceiling and the contributions to employees’ Pension fund made above the wage ceiling in respect of member shall be diverted to the provident fund account of the member.
7. Where the employer and employee has opted to contribute over Rs. 15000, the government share of contribution @ 1.16% on the salary exceeding Rs. 15000 pm will be deducted from employees contribution.
8. Provision for contribution on higher salary is withdrawn i.e. above Rs. 15000. Hence no new option can be allowed to any new employee becoming member on or after 1st September, 2014 for deduction towards pension fund on wage exceeding Rs. 15000.
9. EPS will henceforth apply only to EPF members whose pay at time of becoming member is not more than Rs. 15000. The entire contribution of employer and employee shall remain in PF account and no diversion to EPS shall be made for all new PF members having salary more than 15,000 at the time of joining.
EDLI Scheme, 1976
10. The benefit under the scheme shall be further increased by 20 percent in addition to the benefit admissible under sub-paragraph (1), (2) or (3) of paragraph 22.
