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The scheme had drastically reduced pension to employees
A Division Bench of the Kerala High Court on Friday set aside the Employees Pension (Amendment) Scheme (GSR609(E) effecting various changes in the schemes that have drastically reduced pension payable to employees. The Bench comprising Justice K. Surendra Mohan and Justice A.M. Babu passed the verdict while allowing a batch of 507 writ petitions filed by various employees’ organisations and employees challenging the amendment. The petitioners pointed out that an amendment order issued on August 22, 2014 limited the maximum pensionable salary to Rs. 15,000 a month. The petitioners contended that it was against the spirit of the pension scheme.
Earlier provision
The amendment had omitted an earlier provision allowing employees to be paid pension on the basis of the actual salary drawn if the employee had contributed on the basis of the actual salary on a request jointly made by the employee and the employer. As a result of the amendment, pension of the employees is calculated taking an average of 60 months pay, instead of 12 months. The petitioners pointed out that the amendment classified employees into two categories: as retiring prior and after September1, 2014. Besides, the requirement of additional contribution at 1.6% in the case of existing employees was against the very scheme of the Act. Besides, the amendment also omitted an earlier provision permitting exercise of joint option by the employer and the employee to contribute to the pension on salary exceeding Rs. 6,500 per month from the date of commencement of the scheme. It also stipulated that fresh option should be exercised within six months. The court observed that there was “no justification for stealing bread from the mouths of the pensioners to secure the pension fund. Though the fund is replenished by the present workers, its beneficiaries are the old and infirm former workers. The fund is meant for their sustenance. Hence, the amendments are ultra vires the EPF Act and unsustainable”.
Source : https://www.thehindu.com/todays-paper/hc-quashes-amendment-to-pf-pension-order/article25210468.ece
