EPS-95
ASTO- CEC – Mumbai 27.04.2019
EPS-95 committee members
Shri S S Mayal President Agarthala
Shri A K Sinha President Ankleswar
Shri R Veeramani Secretary Chennai
Chronicle of EPFO
EPFO constituted , based on Parliament EPF act 1952.
It allowed some organizations to manage a trust for PF of their
employees- called exempted organization eg ONGC, Jindal
stainless Ltd, IOC ..
Fund managed by EPFO for some Organizations –called non-
exempted organisation (Universal account Number UAN 12 digit
number was allotted to individual employee)
EPFO introduced “Family Pension Scheme”(FPF) in 1973. ONGC
became part of it.
Pension from FPF was meager, so ONGC introduced own
pension PRBS w.e.f 01.04.1990 for Officers and made
compulsory for all from 15.11.1995.
EPS-1995
“Employees Pension Scheme” EPS-1995 w.e.f 16.11.1995
introduced u/c 11 of EPS-1995
Pensionable salary (Basic+DA)
Restricted to Rs 5000, then raised to Rs 6500 from1/6/ 2001
and now increased to Rs 15000 w.e.f 1/09/2014
u/c 11(3) stipulates that pensionable salary based on higher
salary with consent of employee and employer
Paragraph 26(6) of EPF scheme act described about entitled
class of employees and empowered Authority in EPFO who can
approve joining of EPS for higher salary.(Not below Assistant
Provident Fund Commissioner)
ONGC having PRBS and sought exemption from EPS-1995 .
But ministry of Labour denied OO no. 1(11)/05/EPS/CP
dated 07/09/2005.
ONGC continues with PRBS and opted EPS-95 for notional
basic
ONGC contributing 8.33% of 15000 i.e Rs 1250 pm to EPS
1995. Remaining goes to individual CPF account.
COURT CASES
In 2005 , retired employees from state PSU filed case in various
Hon’ble high court to allow contribution on actual salary for
higher pension
One suit was decided in favour of pensioners which consisted
of exempted and non-exempted organisations.
Status of court case
RC Gupta &Ors Vs RPFC/EPFO .(SLP(C) No. 33032-330333 of
2015 ) Supreme Court verdict favour
Pension on actual salary if contributions is made
No cut –off date for payment
Kerala High Court
Employees Pension Amendments Scheme 2014 notified on 22nd
August has been quashed for restring contribution on actual
salary or more than 15000 salary for timeline of 6 months w.e.f
1-9-2014
No differential treatment of employees whether are from
Exempted or Unexempted establishments as for as higher
pension.
The joint declaration by extant employees and employer's
under taking under para26(6) can be submitted later for
availing option to contribute to pension fund on actual salary
and not limited to ceiling amount.
Madras High Court
Employees of Exempted and non Exempted establishments
entitled for enhanced pension on basis of contribution of
actual salary.
The cut off date prescribed i.e 01.12.2014 illegal and invalid.
Exempted establishment cooperate with EPFO to quantify
amount to be refunded.
Simple Interest rate is 6% on refund amount
The entire process shall be completed with six months EPFO
and individual management
Supreme Court Judgement
on 1/4/19
Present employees of all establishments (Exempted as well
as Non Exempted) can submit joint option form for pension
on actual salary
Pension based 12 months average actual salary.
No deduction of 1.16% when salary exceeding Rs 15000 per
month from employees
Recalculation of pension of post 1/9/2014 retirees is 12
months average instead 60 months
Serving employees who joined after 1.9.2014 are also
eligible for this scheme.
Salient features of EPS-1995
Presently ONGC employees Who joined before 01.09.2014 are
member of EPS-1995
ONGC makes 8.33% from 12%(417,541&1250) contribution to EPS and
remaining goes to CPF.
Employees can still be member of EPS-95 if their salary(basic+DA)
less than Rs 15000/- per month.
ONGC maintaining EPS office at Dehradun and its coordinating with
EPFO and facilitates Ex-ONGCians
Minimum service required 10 years to get pension under EPS
Nominee eligible to get 50% pension if employee death occurs during
service provided at least one month contribution is made to EPS
Incase of deceased employee the 50% of pension payable to spouse
and 25% of widow pension to two children shall be payable up to
attaining the age 25 years
Pension Computation
* Pension = Pensionable Salary X Pensionable Service
70
* Pensionable service= service rendered from 16.11.95 till
attaining age of 58 years
* Pensionable service is computed 6 monthly
* Less than 6 months in a year it is rounded to the previous
year.
* Rendered service more than 20 years to organization and 2
years will be added as bonus.
* Pensionable salary= Average salary (Basic+DA)of 60 months
prior to retirement. As of now restricted to Rs 15000 PM
* Superannuation date extended to 60 years ,the pension amount is increased
by 4% per annum.
Present situation Actual salary
`INR `INR
Monthly 8.33% of `15000/- 8.33% of Actual salary
(Basic+DA)
Contribution 1250 12495 (average monthly
sal `1.5lakhs at E4 level)
EE
Total fund deposited 195682 1800514
Pension after 20 years 4714 47142
service(1.1.2000 to
31.12.2020)
Fund in 4966152 2659884
CPF(employee+employer
)
Data for Pension Calculation
Individual joins at E1 level on 01.01.2000 and retires on
31.12.2020 as E4 level.
Average salary prior to 60 months prior to retirement Rs`150000
No provision of commutation and return of capital under EPS-
95
In case of death of pensioner and spouse and children attaining
age of 25 , the pension will be stopped.
Viability of Scheme
Govt. of India liability is limited to 1.16% of the salary or
`RS15000 whichever less i.e maximum ` 174 per employee per
month.
“Funds of one group will not be given to other group of
employees” by Hon’ble Minister MoLE on the floor of parliament
(Media news)
Fund shall sustain for limited period for higher pension.
EPS-95 is defined pension scheme(DPS). Pension drawn from
common corpus. It can sustain when younger subsidize the
elder.
Conclusions
Not eligible, employees joined on or after 01.09.2014.
No sovereign guarantee is available.
Subject to sustainability of scheme. No actuarial valuation of
scheme is available
More Beneficial to employees retired or retiring in 4-5 years.
Employees with longer period of service it may not feasible as
the sustainability is at stack.
20
