The Supreme Court has cleared the way for a huge increase in the pension of all the employees of the private sector. This will increase the number of private sector employees' pension in multiples. The court has upheld the Kerala High Court verdict rejecting the EPFO petition in this case. The Kerala High Court was ordered to give pension to the employees according to their full salary. At present, the pension is calculated based on the limit of bathe sic salary of Rs 15,000 by EPFO.

Significantly, 12 percent of the basic salary of employees goes to PF and 12 percent is deposited by the employer in his name. 8.33 percent of the company's 12 percent stake goes to the pension fund and the remaining 3.66 in the PF. According to the Times of India, the Supreme Court has now clarified that the pensions of private employees will be calculated on the basis of full pay. This will increase the pension of the employees manifold.

EPF Pension or EPS is a pension scheme under which the amount of money equivalent to 8.33 per cent of Basic Salary (not more than 1250 rupees per month) is deposited in this scheme during the employment of employees working in the organized sector of the private sector. In return, it provides a fixed monthly pension to the employee after retirement.

The Employees Provident Fund Organization (EPFO) of the Government of India manages the EPF and pension accounts of all employees. Every institute where 20 or more employees work, has to take part in the EPF. EPS runs with this scheme and hence every member of the EPF scheme becomes a member of the pension scheme.

In EPF or EPS, it is compulsory to get the contribution of employees whose basic salary + DA is 15000 rupees or more. Employees who get more basic salary than this have the option of adopting or leaving the EPF and EPS. One part of the money the employer puts in your PF account is used only for the pension scheme, while the money you make from your salary goes into full EPF scheme.

So if pension becomes the whole salary, then the employees' pension will be multiplied. The disadvantage in this is that the pension will increase, but the fund of the pension fund will be reduced, because the additional contribution will go to EPS instead of going to the EPF. The Central Government started EPS in 1995. Under this, the employer had the rule of putting an 8.33 percent share of the basic salary of employees (up to 541 rupees per month) in the pension scheme. But on September 1, 2014, EPFO changed it to 8.33 per cent of the basic salary of 15,000 (maximum Rs 1,250 per month). Pension and PF arrangements for government employees are under GPF.