Supreme Court upholds amended employees' pension scheme with modifications; extends deadline to join it

Tribune News Service

Satya Prakash

New Delhi, November 4

The Supreme Court on Friday upheld the validity of the 2014 Employees’ Pension (Amendment) Scheme even as it read down some of its provisions to make it beneficial to employees.

A three-judge Bench led by CJI UU Lalit declared the provisions of the notification dated August 22, 2014 as valid. 

However, it read down some of the provisions by allowing in-service employees to avail the benefit of the option under EPS, which permits the employer and employees to make uncapped pension contribution.

The Bench -- which also included Justice Aniruddha Bose and Justice Sudhanshu Dhulia -- ruled that exempted and un-exempted establishments have to be treated equally for the purposes of EPS.

The amendment to the pension scheme shall apply to exempted establishments like regular establishments, it said.

"What we have directed for exempted will be applicable to regular as well, Justice Bose said, pronouncing the verdict.

Detailed verdict is expected to be uploaded on the top court's website by Friday evening.

The verdict came on appeals filed by Employees’ Provident Fund Organisation against a decision of the Kerala High Court setting aside amendments on “determination of pensionable salary” under the Employees Pension Scheme (EPS) of 1995.

EPFO had contended that the EPS would face a “complete collapse” if the Kerala High Court verdict was allowed to operate.

The Bench said the fund members who did not exercise option as it was before 2014, shall be eligible to exercise the option.

With regard to the post amendment scheme, the top court said all employees who did not exercise option due to lack of clarity ought to be given more time to exercise it. It extended the deadline by four months for the purpose.

However, the employees who retired before the 2014 scheme would not benefit from the judgment. Those who retired after the 2014 scheme after the exercising of option would be entitled to take benefit of the scheme, it said.

"We have suspended a part of our order for six months so that authorities can generate the funds and it is up to the framer of legislation for any amendment, etc, the Bench said.

"We do not find any fault in changing the basis for finding the computable salary for such purposes. The contempt petitions are disposed of. All appeals are allowed and judgments are modified accordingly. Petitions by employees also disposed of," it said.

The scheme had capped the maximum pensionable salary at Rs 15,000 and created an additional obligation on contribution exceeding this ceiling. 

The whole controversy is around the amendments made to Clause 11(3) of the EPS-1995.

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