Employees’ Pension Scheme: Centre plea against Kerala HC’s 2018 order in SC today


The Supreme Court will take up Monday the Centre’s plea challenging the 2018 judgment of Kerala High Court that set aside amendments made to Employees’ Pension Scheme (EPS), 1995, fixing the maximum pensionable salary at Rs 15,000 per month.

A bench headed by Justice U U Lalit will also consider on Monday a review petition by Employees’ Provident Fund Organisation against the Supreme Court order rejecting its appeal against the 2018 high court verdict.

The Centre’s appeal said “with the striking down of the amendments, the very survival of EPS is in jeopardy” and that a study of the impact of the impugned judgment “shows that as against the total corpus of EPS of approximately Rs 3.77 lakh crores, the total liability in terms of the impugned judgement stands at more than Rs 10 lakh crores…”

The “reason for this precarious position is that the judgement fails to consider the rationale behind the amendments” carried out in Section 11 of the EPS.

Prior to the amendment, the maximum pensionable salary was Rs 6,500. However, it permitted the pensionable salary to be based on a higher salary amount at the mutual option of the employer and employee. The 2014 amendment increased the maximum pensionable salary to Rs 15,000 per month. It also introduced conditions in the option to contribute a higher amount.

The government said “employees in the lower economic strata…earning upto Rs 15,000 per month benefited from 2014 amendments because their entire salary upto the limit of Rs 15000… constituted pensionable salary without any requirement of the consent of the employer”.

Members with salary above Rs 15,000 challenged it as violative of Article 14, the Centre said, adding the “challenge was incorrect because” the provisions “expressly grants the power to Central government to regulate the membership to EPS”.

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