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Supreme Court upholds HC Judgment by quashing pension (Amendment) scheme, scheme, 2014 which was for the Employee’s pension to be proportional to salary. The Supreme Court has dismissed the special leave petition filed against a Kerala high court judgment setting aside Employee’s pension (Amendment) scheme, 2014 that capped maximum pensionable salary to Rs.15, 000 per month. The Kerala High court, in October, 2018 had allowed the writ petitions filed by the employees of various establishments covered by the provisions of the Employees provident funds and miscellaneous provisions Act, 1952. The bench comprising the CJI Ranjan Gogoi, Justice Deepak Gupta and Justice Sanjiv Khanna dismissed the SLP filed by Employees Provident Fund Organization as they did not find any merit in the petition.
The Amendment has brought these changes in the pension scheme:
EPFO has contended before the High Court by defeating these amendments that, payment of pension computed on the basis of the contributions made on their actual salaries by the employees would deplete the pension fund and would make the scheme unworkable, but the contension has been rejected by the High Court and it was found arbitrary and unsustainable that the provisions capping the maximum pensionable salary at Rs. 15, 000 /- thereby disentitling the persons who have contributed on the basis of their actual salaries to any benefits on the basis of excess contributions made by them.
The division bench comprising Justice Surendra Mohan and Justice AM Babu observed that: “to cap the salary at Rs.15, 000/- for quantifying pension is absolutely unrealistic. A monthly salary of Rs.15,000/-works out only to about Rs.500/- per day, therefore to limit the maximum salary at Rs.15,000/- for pension would deprive most of the employees of a decent pension in their old age.”
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