Supreme Court Judgement On Higher Pension Pdf !FULL! Download

The EPFO has issued a circular on 20 February 2023, where they have instructed field officers to prepare for the implementation of the directions of the Supreme Court Judgement. In particular, this latest circular provides the opportunity to apply for higher EPS pension to the following category of employees:

The Employees' Provident Fund Organisation (EPFO) has issued clarification in regard to eligibility criteria for higher pension. The Provident Fund (PF) regulator issued circular in compliance to the Supreme Court order laying down the terms and condition for an EPFO subscriber for getting higher pension. The EPFO clarification also instructs EPFO members on how to apply for the higher pension after the Supreme Court order. The EPFO also made it clear that fund authorities shall implement the Supreme Court ruling within a period of eight weeks, subject to EPFO directions contained earlier in paragraph 11(3) of the 1995 scheme.

Supreme Court Judgement On Higher Pension Pdf Download

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Clarifying on the eligible EPFO subscribers for higher pension after the Supreme Court ruling, EPFO circular says, "The employees who have retired before 1st September 2014 upon exercising option under paragraph 11(3) of the 1995 scheme shall be covered by the provisions of the paragraph 11(3) of the pension scheme as it stood prior to the amendment of 2014."

How to eligible pensioners can apply for higher pension?The eligible EPS members need to visit concerned regional EPFO office and submit the required application along with proper documents. Here is step by step guide:

Subsequently, the EPFO vide circular dated 20 February 2023 acknowledged that the employees who satisfy the following conditions may, along with their employers, submit joint option application with the EPFO under the Pension Scheme to avail higher pension:

In its latest notification dated 3 May 2023, the Central Government has informed that, for employees who apply for higher EPS pension (and are found eligible), the employer contribution to the EPS will be 9.49% of PF salary (instead of 8.33% of PF salary). This additional contribution of 1.16% will be payable on the PF salary exceeding 15,000 per month. Moreover, this will apply retrospectively from 1 September 2014.

As part of the data validation process, the EPFO has asked employers to upload a file (through an online process) with the historical wage details of employees who have opted for the higher pension. The data submitted by the employers will be verified with the data available by the field officers at the RPFC, and accordingly, the necessary amount will be transferred across from EPF to EPS (if the data is found complete and accurate).

In view of the above, WTW strongly recommends that employers assess the implications of the higher pension option and prepare for its implementation, along with the added complication of adjusting for 1.16% contribution retrospectively. There may be a need to conduct more employee awareness sessions, update the pension calculators and also evaluate the calculation methodology to determine the amount to be transferred from EPF to EPS.

Such persons will now be guided by Para 11(4) and although theSC judgment did not specifically mention this, the members of thiscategory who retired after September 1, 2014, should be eligiblefor higher pension.

The right of these persons to higher pension has beencrystallised under the RC Gupta Judgment. This category can nowexercise their option under Para 11(4) for a period of 4 monthsfrom November 4, 2022 (i.e., until March 3, 2023). Although the SCjudgment did not specifically mention this, the members of thiscategory who retired after September 1, 2014, should be eligiblefor higher pension.

4.3. EPFO Circular dated January 25, 2023,("Circular 2"): Circular 2 effectivelyreiterated the position specified in the SC judgment and statedthat employees who retired prior to September 1, 2014, withoutexercising any option under the Unamended EPS (i.e., category 4 inthe table above) will not be entitled to higher pension.

5.1. Although the EPFO has provided some clarity on how eligibleemployees can avail higher pension in light of the SC judgment,several operational issues unfortunately continue to remain. Atpresent, given that the deadline given by the SC is imminent,employers would do well to internally inform eligible employees ofthese changes and assist / facilitate their applications in themanner prescribed by the EPFO circulars.

The litigation by employees arose because the Union Government amended EPS-1995 effective September 1, 2014, introducing, among other changes, a time limit of six months for the members, jointly with their employers, to opt for higher pension based on their actual salary, and a further six months where reasonable cause for delay existed. The time limit was, however, not known to the employees as there was no communication to them; subsequent applications for higher pension were rejected by the EPFO citing the cut-off date, even after it had been set aside by a two-judge bench of the SC in the precedent-setting R.C. Gupta case in 2016.

One section of current employees (and by extension members of the pension scheme who were contributing to the pension fund as of September 1, 2014) stand to benefit from the order. The SC bench directed that members of the scheme who did not exercise the option for higher pension as provided for in the scheme as it existed before the 2014 amendment, were entitled to exercise the option, jointly with their employers, even under the amended scheme. This right was upheld in the R.C. Gupta judgement, which said no cut-off date was envisaged in EPS-1995.

Yet, the court specifically excluded those who retired prior to September 1, 2014 without exercising the joint option in the unamended scheme, since they had already exited the membership. This part of the order covers older employees who get a meagre pension. They cite lack of communication on the option of higher pension while in service.

Cranston Police Retirees Action Committee v. City of Cranston7 was a Rhode Island Superior Court case permitting the suspension of a 3 percent annual compounded COLA. The court first determined that the plan participants had a contractual right to the COLAs at issue and that the suspension of those COLAs constituted a substantial impairment of that contract. Even though the court found that there was a substantial impairment of contract, it also determined in this case that the city had satisfied the difficult police power test and was justified in suspending the COLA.

These distinctions often lead courts to conclude that retiree health care benefits are not earned through service in the same way as pension benefits and are therefore governed by different legal rules.

This broad protection, referred to as the California Rule, is the highest level of pension protection that has been established through court rulings. Because of this interpretation, pension benefits for current employees cannot be detrimentally changed even if the changes are only prospective.

In the past several years, five California appellate court decisions have considered whether certain changes to pension benefits were permitted, marking a significant change from long-standing interpretations of the California Rule. The California Supreme Court has granted review in each of these cases, four of which are still pending, raising the strong possibility of new guidance on the rule.20

The Illinois Supreme Court has struck down the state's landmark 2013 pension reform law, upholding a lower court ruling that it violated the state constitution. In the ruling, the court rejected the state's defense that its contractual obligations were not absolute, because it reserved "emergency powers" in a time of crisis.

The Residual Discretion of the Court. The third limb of the question was: If the Court had found that the pension liabilities were neither provable debts nor expenses, could the Court order that they be treated as such? This idea was firmly quashed by the Court as being \"wrong in principle\" and \"highly problematic in practice\". It would be wrong for the Court to overrule statute and problematic because of the confusion to officeholders that it might cause and court applications by disgruntled creditors seeking a higher ranking. Further, the Court held that it could not sanction a course which was outside an administrator's statutory power, such as varying creditors' rankings.

Not only does this decision bring certainty after two and half years of court proceedings, it also brings clarity as to where pension liabilities will rank in an insolvency. Additionally it settles that pension liabilities are provable debts whether or not an FSD or CN are issued and whether or not they are issued after insolvency proceedings. This will help creditors and debtors in insolvency contingency planning and bring certainty to consensual restructurings. More broadly, it provides a useful test for establishing what is a provable debt and overrules a diverging line of judgments.

The Residual Discretion of the Court. The third limb of the question was: If the Court had found that the pension liabilities were neither provable debts nor expenses, could the Court order that they be treated as such? This idea was firmly quashed by the Court as being "wrong in principle" and "highly problematic in practice". It would be wrong for the Court to overrule statute and problematic because of the confusion to officeholders that it might cause and court applications by disgruntled creditors seeking a higher ranking. Further, the Court held that it could not sanction a course which was outside an administrator's statutory power, such as varying creditors' rankings. e24fc04721