JUDICIARY WATCH

SC posts for May plea by EPS members against EPFO

Staff reporter, New Delhi
16/03/2019   0 Comments

A Bench led by the Chief Justice of India has posted 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, for final arguments in May. The plea, filed by several affected petitioners led by V.N. Sharma, was admitted on September 28 last year. The petitioners have claimed 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 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. The EPFO’s August 28, 2014 amendment had raised the wage ceiling amount for the scheme to ?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.

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 apex court’s 2016 order. With confusion prevailing, and different regional EPFO offices interpreting the order and circular differently, another slew of petitions landed in the courts.

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