EPF Pension Case : 'No Deficit In Pension Fund', Pensioners Tell Supreme Court Countering EPFO Argument Of Financial Burden [Hearing Day 3]

On the third day of hearing the EPF Pension case, the counsel appearing for the pensioners from Kerala on Thursday (August 4) questioned the veracity of the actuarial reports and other documents furnished by the Employees Provident Fund Organisation (EPFO) which pointed out that implementing the Kerala High Court Judgment of 2018 would cause a net actuarial deficit of Rs.15,28,519 crores in the Pension Fund.In 2018, the High Court, while setting aside the Employee's Pension (Amendment) Scheme, 2014 [2014 Amendment Scheme], allowed paying pension in proportion to the salary above the threshold limit of Rs 15,000 per month.A 3-judge bench comprising Justices UU Lalit, Aniruddha Bose and Sudhanshu Dhulia was hearing the appeals filed by the Employees Provident Fund Organization challenging the Kerala, Rajasthan and Delhi High Court judgments which had quashed the 2014 Amendment Scheme.Before the Bench, Senior Advocate Dr. Kailas Natha Pillai, appearing for a set of employees from Milma(Kerala Milk Co-operative Marketing Federation) submitted that the both the actuarial reports are misleading as only the liability of the pensionary benefits were projected.As the hearing progressed, Pillai took the Court through the provisions of the EPS Scheme."My submission is, plainly and simply, before the Amendment, we were safe, and our remittances were also safe. After the amendment, clauses have been added""What happens is, before the Amendment, whether you must exercise an option or not? That aspect is slightly grey. But now, after Amendment, they have made it compulsory", Bench said. "That's a new condition, which is not acceptable to us. That is against the spirit of the Pension Scheme as well as the Provident Fund Act", Pillai argued. "When did you raise your challenge as far as the option business is concerned?", the court further queried. "The same year, before the High Court", the Advocate replied. Yesterday, the Supreme Court had posed queries to the Union Government and sought materials to show the financial burden which will be created on the implementation of the High Court judgments allowing pension in proportion to the salary above the threshold limit.Here are the other key aspects that were discussed during the course of the hearing: Pension is paid out of the interest accrued on the fundPillai pointed out that the corpus of Pooled Pension Fund under the Pension Scheme which stood at Rs.3,18,412.38 Crores on March 31, 2017 increased to Rs.4,37,762.54 Crores within two years. The accumulated corpus had always grown steadily from Rs.1,83,405.36 crores in 2012-2013 to Rs.4,37,762.54 Crores in 2018-2019 which is an increase of about 130% in 7 years. Further, the interest earned on the Fund invested was Rs.14,354.68 crores during the year 2012-2013, which had increased more than 130 % in 2019, to 3 32,982.68 crores. Pillai pointed out that as per the Annual report produced by the EPFO and UOI itself, the total amount disbursed towards pension as on 31.3.2019 is only Rs.18,843 crores, which is only 55 % of the interest earned. "This does not affect the amount on the principal investment/corpus….. The fund has not witnessed any cash flow problems till now inspite of there being a projected actuarial deficit in the valuation of the fund….", Pillai submitted, while aiming to challenge the credibility of the data produced by EPFO and the Union and pointing out that it is false. Additionally, he also attacked the appellants' submission that the EPS Fund is a "pooled fund" and the purported "cross-subsidization" in pension at the cost of mandatory members. Pillai said that according to the data provided by EPFO, the Pension Scheme works on the Principles of insurance, i.e. Pooling and sharing of Risk and covering of various Risks, which EPFO is wrongly terming it as "Cross Subsidy". There is no element or nomenclature called cross-subsidy in EPS, 1995, he said. Both Funds Are Investments of the Same Nature After Pillai completed his arguments, Senior Advocate Jayant Muthuraj, appearing for the employees in Malapuram District Co-operative Bank made submissions. It was argued both the Provident Fund and Pension Fund are investments of the same nature. The only difference between the two, would be book adjustment, Senior Advocate Muthuraj said. This contention came in response the appellants' contention that EPFS and EPS differ in its structure and working. On Tuesday, Senior Advocate Aryama Sundaram appearing for EPFO had told the Supreme Court that the structure of Employee Provident Fund Scheme (EPFS) and Employee Pension Scheme (EPS) is entirely different.Secondly, as per the 2014 Amendment, emoluments, for the purpose of pension will be calculated on the based of salary received for the last 60 months, instead of 12 months, as it was originally. This affects the vested rights as far as the employee is concerned. So, Muthuraj's submission was that this could not have been done as the rights of the employees cannot be...

EPF Pension Case : 'No Deficit In Pension Fund', Pensioners Tell Supreme Court Countering EPFO Argument Of Financial Burden [Hearing Day 3]

Rintu Mariam Biju

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Rintu Mariam Biju

EPF Pension Case : 'No Deficit In Pension Fund', Pensioners Tell Supreme Court Countering EPFO Argument Of Financial Burden [Hearing Day 3]

Rintu Mariam Biju

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Rintu Mariam Biju

This is a premium content
Available exclusively to
Our subscribers