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Pension for PSU, pvt staff valid: SC
Our Legal Correspondent

New Delhi, November 11
The Supreme Court today upheld the validity of contributory pension scheme for public sector undertakings and private sector employees, introduced by the Centre in 1996 and gave a green signal to the government to go ahead with its implementation across the country.

The scheme, which would extend to all those employees covered under the provident fund (PF) scheme, provided that 8.33 per cent of employer’s contribution on the basic salary plus dearness allowance of an employee to the PF, has to be transferred to the pension fund.

The prevailing family pension fund (FPF) scheme was also merged in the new scheme under the Employees Provident Fund Miscellaneous Provisions Amendment Act, 1996 to bring it into force.

Upholding the validity of the scheme, a Bench comprising Mr Justice S. Rajendra Babu and Mr Justice K.G. Balakrishnan dismissed the writ petitions by nearly 80 employee unions from all over the country.

The court, however, said it would deal separately with the issue whether exemption could be given to the management of a PSU or a private sector entity to have its own pension scheme, which is better than the one approved by the government.

The apex court had ordered the transfer of all petitions from various high courts to it after conflicting judgements were given by them.

The unions had questioned the parting of a substantial portion of employer’s PF contribution in the pension fund under the scheme and contended that the monthly pension proposed under it was meagre.

The employees said the method adopted for computing the pension for an employee on his superannuation was irrational.

The unions, which had demanded a pension formula akin to the government employees, said the scheme was “arbitrary” and the government could not hold back the PF contribution of the employer.