Pension scheme amendments held incompatible with statutory purpose, as date-based limits and added contribution burdens lacked legal authority.

The Employees' Pension (Amendment) Scheme, 2014 is described as going beyond the parent Act by creating date-based classes of covered employees and introducing restrictions not authorised by the statutory pension structure. The text states that the Rs. 15,000 salary ceiling and the demand for an additional 1.16% contribution had no statutory basis and were inconsistent with the scheme's earlier joint-option framework. It also says the cut-off date and the 60-month averaging rule for pensionable salary were arbitrary and curtailed pension benefits without lawful justification. The amendment scheme and consequential actions were therefore set aside, and employees were entitled to exercise the pension option without date-based restriction.

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Issues: (i) Whether the Employees' Pension (Amendment) Scheme, 2014 was ultra vires the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the powers conferred under the pension scheme; (ii) Whether the ceiling of pensionable salary at Rs. 15,000 and the requirement of an additional contribution of 1.16% could be sustained; (iii) Whether the insistence on a cut-off date and the revised computation of pensionable salary over 60 months were valid.

Issue (i): Whether the Employees' Pension (Amendment) Scheme, 2014 was ultra vires the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the powers conferred under the pension scheme.

Analysis: The statutory scheme under Sections 5, 6 and 6A of the Act treats covered employees as a homogeneous class and permits constitution of the Pension Fund only by transfer of a portion of the employer's contribution under Section 6. The Act does not contemplate creation of new classes of employees for pension purposes or extraction of additional amounts beyond the statutory contribution structure. The amendment, by introducing fresh classifications based on the date 1.9.2014 and by limiting benefits accordingly, went beyond the power to amend the scheme under Section 7 and was inconsistent with the object of the enactment.

Conclusion: The amendment was ultra vires and unsustainable.

Issue (ii): Whether the ceiling of pensionable salary at Rs. 15,000 and the requirement of an additional contribution of 1.16% could be sustained.

Analysis: The earlier scheme permitted employees and employers, by joint option, to contribute on actual salary. The amended ceiling of Rs. 15,000 was found to be unrealistically low and arbitrary in the present wage structure, and it deprived employees who had contributed on actual wages of pension commensurate with their contributions. Further, Section 6A does not authorise the demand of any additional employee contribution for constituting the Pension Fund, and there was no statutory basis for shifting 1.16% liability to employees.

Conclusion: The salary ceiling and additional contribution requirement were invalid.

Issue (iii): Whether the insistence on a cut-off date and the revised computation of pensionable salary over 60 months were valid.

Analysis: The earlier judicial determination had already held that the joint option under the pension scheme could not be defeated by imposing a cut-off date, and the same principle applied to the amended scheme. The substitution of a 60-month averaging period for pensionable salary was also held to be arbitrary because it reduced pension benefits without statutory sanction or rational justification. The classification of employees by reference to the amendment date lacked a valid basis and was inconsistent with the social welfare purpose of the scheme.

Conclusion: The cut-off date and 60-month averaging rule were invalid.

Final Conclusion: The impugned amendment scheme and all consequential actions taken under it were set aside, and the employees were held entitled to exercise the pension option without being restricted by any date-based insistence.

Ratio Decidendi: A pension scheme framed under the Act cannot, by delegated amendment, create date-based classes of covered employees, impose additional monetary burdens not authorised by the parent statute, or curtail accrued pension benefits in a manner inconsistent with the statutory purpose of providing social welfare pension.

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