Cut-off date in a new pension scheme upheld where earlier retirees had no vested right to retrospective coverage.
The RBI Pension Regulations, 1990 introduced a wholly new pension scheme in substitution of the earlier contributory provident fund arrangement, so employees who had already retired before 1 January 1986 had no vested right to be brought within its coverage. The classification between pre-1986 retirees and later retirees was upheld because it reflected the model adopted from the Central Government pension scheme, the financial burden of extending the scheme retrospectively, and practical difficulties from unavailable service records. The earlier liberalisation principle was confined to revision of an existing pension scheme and did not control the introduction of a new retiral benefit. The cut-off date was therefore held not to violate Article 14.
Issues: Whether Regulations 3(3) and 31 of the Reserve Bank of India Pension Regulations, 1990, by fixing 1 January 1986 as the cut-off date and denying pension to employees who retired earlier, violated Article 14 of the Constitution of India.
Analysis: The pension scheme introduced under the Regulations was held to be a wholly new scheme in substitution of the existing contributory provident fund scheme. Employees who had retired earlier had already received their retiral benefits under the provident fund scheme and had no vested right to claim coverage under the new pension scheme. The distinction drawn by the Regulations between retirees before 1 January 1986 and those retiring thereafter was supported by the model adopted from the Central Government pension scheme, the financial burden involved, and practical difficulties arising from the non-availability of old service records. The principle in the earlier liberalisation case was held to apply to revision of an existing pension scheme, not to the introduction of a new retiral benefit.
Conclusion: The cut-off date was not arbitrary or discriminatory, and Regulations 3(3) and 31 were not violative of Article 14.
TaxTMI 
AI Drafter ✕
TaxTMI 
