What is this all about Pension Scheme and its pending matter before the Apex Court

1. Now the hearing and argument of both the parties that is 67 Petitioners and Respondent, EPFO is over and SC has reserved its judgment.

2. The appeal was filed by EPFO challenging the Kerala, Rajasthan & Delhi High Court judgments which had quashed the EPS (Amendment) Scheme of 2014 restricting EPS membership for the employees whose Basic salary is upto Rs. 15,000/- pm.

3. In 2018, the Kerala HC, while setting aside the Employees’ Pension (Amendment) Scheme, 2014 allowed paying Pension in proportion to the salary above the threshold limit of Rs. 15,000/- pm. The HC also held that there can be no cut-off date for joining the Pension Scheme.

4. In 2019, the SC had dismissed the Special Leave Petition filed by the EPFO against the Kerala HC judgment. Later, in review sought by the EPFO & Union Govt., the dismissal of the SLP was recalled and the matter was reopened for hearing on merits.

5. In August 2021, a 2 Judge Bench of the SC had referred the appeals to a 3 Judge Bench to consider the following two issues;

A. Whether there would be cut off date under paragraph 11(3) of the EPS and
B. Whether the decision in R.C. Gupta vs. RPFC (2016) would be the governing principle on the basis of which all these matters must be disposed.

6. The main argument raised by the EPFO is that the Pension Fund and Provident Fund are distinct and the membership in the latter will not automatically translate into the membership of the former. It was argued that Pension Scheme is intended for low-age employees and if the person drawing salaries above the cut off limit are allowed to draw pension as well, then it will create huge imbalance within the fund. The 2014 amendments were brought to address the issue of cross-subsidization between the Pension and Provident Funds.

7. The Pensioners disputed the argument of financial burden raised by the EPFO. It was argued by them that the corpus fund remains intact and the payments have been made from the interest. The Pensioners also disputed the argument of the EPFO that there has to be separate option exercised within the cut off period to join the Pension Scheme and contended that the stand of EPFO is contrary to the statute.

8. Detailed reports of the hearing of different days are given below;

A. EPFO tells SC that PF Members do not automatically become eligible under EPS.

B. SC asks Centre & EPFO to show materials on cross subsidy and finacial burden.

C. While countering the argument of the EPFO, the Pensioners tell SC that there is no deficit in Pension Fund.

D. Pensioners argue that they can not be asked to contribute 1.16% of salaries above Rs. 15,000/-.

E. Pensioners tell the SC that Pension corpus remains intact, payments come from interest and EPFO can not raise fund issue.

F. SC asked Govt. & EPFO why Annual Reports do not reflect potential financial burden that would befall the Govt if Pensioners are allowed to opt for the EPS retrospectively and beyond Rs. 15,000/- wage limit.

Finally after the 6 days hearing from both the parties a 3 Judge bench comprising J. Uday Umesh Lalit, J. Aniruddha Bose & J Sudhanshu Dhulia reserved judgment.