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CITING SC: MADRAS HC ORDERS ENHANCED PENSION

Focus: GS-II Social Justice

Why in news?

The Madras High Court, citing the Supreme Court verdict in the landmark R.C. Gupta case (2016), has ordered enhancement of pension payable to a litigant found eligible for the revision of pension on higher wages.

1995 pension scheme

  • Under the Employees’ Pension Scheme, 1995, on the determination of pensionable salary, the maximum pensionable salary was limited to Rs. 6,500 per month.
  • In 2014, under the Employees’ Pension (Amendment) Scheme, the maximum pensionable salary was revised to Rs. 15,000.

No cut-off dates

  • In 2016, the Supreme Court in the R.C. Gupta case ruled that there was no cut-off date to determine the eligibility of the employer-employee to indicate their option (the contribution paid on the salary exceeding ₹6,500 per month from the date of commencement of this scheme or from the date the salary exceeded Rs. 6,500, whichever is later, and the 8.33% share of the employer is remitted into the pension fund, the pensionable salary will be based on such higher salary).
  • The court was of the view that a beneficial scheme ought not to be allowed to be defeated by reference to a cut-off date.
  • Further, the Supreme Court held that in the situation where the deposit of the employer’s share was on actual salary and not the ceiling amount, all that the Provident Commissioner was required to do was adjustment of accounts. He/she could seek the return of all such accounts that employees concerned may have taken or withdrawn from their Provident Account Fund before granting the benefit of the pension scheme.

-Source: The Hindu

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September 2022
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