Unsplashed background img 1
SC TO HEAR ON JANUARY 25 PLEA ON 1995 PENSION SCHEME - The Employees Provident Funds and Miscellaneous Provisions Act, 1952

New Delhi: The Supreme Court has posted for hearing on January 25 a petition filed by retirees and members of the Employees’ Pension Scheme (EPS), 1995 against the government and the Employees Provident Fund Organisation (EPFO), which administers the scheme.

The petitioners claim that a 2014 amendment and a 2017 circular exclude thousands from receiving their rightful benefits under EPS 95.

The petitions represent the members of the National Confederation of Retirees, that is about 42,555 former employees from the private and public sector who are members of EPS 95, and the National Confederation of Officers Association, which represents 19,118 people working in Central public sector organisations. Most of the latter group are members of EPS 95.

"It is a settled law that pension is not a bounty payment to which an employee is entitled to as a matter of right as retiral benefit for services rendered by him. It is a social security provided for him to lead a dignified life," the petitioners have argued.

EPFO's August 28, 2014 amendment had raised the wage ceiling amount for the scheme to Rs 15,000 and amended the option for contribution on higher salary for existing employees, introducing a cut-off date of September 1, 2014.

It also reduced the pensionable salary considerably by averaging 60 months’ salary instead of 12 months to determine the last drawn salary amount. 

According to the petition, the effect of this amendment is to exclude all new employees who joined after September 2014 from joining the pension scheme altogether; to exclude serving employees from benefiting from the option of contributing to the pension scheme on maximum salary; and to deny the benefit of opting for the scheme to retired employees if they missed the cut-off date.

The amendment and cut-off date were not given sufficient publicity to allow employees to opt for pension on higher salary if they wished, says the petition, adding that, "It is in these circumstances that the majority of the employees remained ignorant of the options available to them for the betterment of their life after retirement."

 In an October 2016 order, the Supreme Court had struck down the cut-off date clause in the amendment. Two months later, the Central Board of Trustees of the EPFO decided to comply with the order and allow members to get the benefit of pension on a higher salary.

However, on May 31, 2017, EPFO issued a circular claiming that EPS 95 members from "exempt" companies were excluded from the benefits of the SC's 2016 order. These are companies which are exempt from maintaining a provident fund with EPFO, but not exempt from participation in the pension scheme.

Confusion prevails

With confusion prevailing, and different regional EPFO offices interpreting the order and circular differently, another slew of petitions landed in the courts. Currently, at least 27 cases on various aspects to EPD 95 are pending in the Supreme Court

The Hindu. 27.11.2018

Did you find this content helpful?

Yes No

Call us on 09920-100-462 |Request a quotation

LK Nakashe Consultants Pvt. Ltd is India’s leading compliance & labour law consulting firm. Headquartered in Mumbai, we are ISO 9001 Certified & Crisil Certified, and we serve all 29 states and 7 union territories of India. Our service bouquet includes Registration & Renewal Services, End-to-End Monthly Compliance Services, Audit & Due Diligence Services, Advisory & Consulting Services, Payroll Management Services and Contract Staffing Services. Our client list of 750+ companies includes some of India’s biggest business conglomerates, MNCs, public listed companies & SMEs

First-of-its-kind app that UN-COMPLICATES compliance & labour laws. Download for free on iOS & Android Google play App store