Prospective pension schemes may exclude past retirees where the cut-off date is justified by financial and administrative considerations.

Employees who retired before a newly introduced pension scheme took effect form a separate class from those in service on the operative date, so they cannot claim the scheme's benefits unless it is expressly made retrospective. A prospective cut-off date is not arbitrary merely because it excludes past retirees, particularly where the employer's choice is supported by financial and administrative considerations. The Supreme Court therefore upheld the employer's power to introduce the pension scheme prospectively and rejected retrospective extension to pre-cut-off retirees.

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Issues: Whether employees who retired before the commencement of a newly introduced pension scheme could compel the employer to extend that scheme retrospectively from the date fixed by the employer.

Analysis: The employees had retired under the Contributory Provident Fund Scheme and had already received their full retiral benefits under the rules then in force. The pension scheme was introduced prospectively with effect from a fixed date after taking account of exemption requirements and financial implications. A class of retirees who had ceased to be employees before that date could not be treated as identical to employees in service on the operative date. A prospective cut-off date in a new pension scheme was not arbitrary merely because it excluded past retirees, especially where financial and administrative considerations supported the date chosen.

Conclusion: The appellant was entitled to introduce the pension scheme prospectively from 1.7.1986, and the respondents who retired before that date had no right to claim retrospective extension of the scheme.

Final Conclusion: The High Court's grant of retrospective pensionary relief was set aside and the dismissal of the writ petitions by the learned Single Judge was restored.

Ratio Decidendi: Persons who retired before a new pension scheme comes into force form a separate class from those in service on the operative date, and unless the scheme is made expressly retrospective, they cannot claim its benefits merely because of a later introduction of the scheme.

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