The provisions in the Employees’ Pension Amendment (Scheme), 2014, are legal and valid as per the Supreme Court.
It has, however, allowed four months’ time to those became members of the scheme before the 2014 amendment and whose salaries exceed the threshold introduced in 2014, to join the scheme by exercising the higher option, as reported by LiveLaw.in
According to the 2014 amendment, members who earned over Rs.15,000 a month had to join the scheme afresh, by exercising a fresh option within six months from September 2014. Such employees were required to make an additional contribution at the rate of 1.16 per cent on salary exceeding the Rs 15,000 cap.
The Court has also declared invalid the condition of additional contribution saying “it is ultra vires the Employees Provident Fund and Miscellaneous Provisions Act 1952”.
Approval has been given by the Court to all other 2014 amendments, including the manner in which pensionable salary is calculated.
However, the SC has issued a clarification that the relaxations allowed by the judgment will not be available to employees who retired before September 1, 2014 unless they exercise the option.
The 2014 amendment does not allow employees who joined service after September 1, 2014 to join the pension scheme if their monthly salary exceeds Rs 15,000. The Court has not changed or tampered with this clause, and therefore, only the members who opted for the scheme before September 2014 will enjoy the benefits of the judgement.
The bench comprised Chief Justice U U Lalit and Justices Aniruddha Bose and Sudhanshu Pardiwala.
This ruling has modified the verdicts of Kerala, Rajasthan and Delhi high courts quashing the 2014 scheme.
The judgement was delivered following the pleas filed by the Centre and the Employees’ Provident Fund Organisation (EPFO).
The EPFO presently has over 58 million subscribers. The orders of the apex court will be implemented within eight weeks.