Employees’ Pension Scheme, 1995 (Section 6A)

Employees’ Pension Scheme, 1995 (Section 6A) :

Before the introduction of this new Pension Scheme, social security measures available to employees were inadequate for they did not provide for monthly pension to members on superannuation, widow pension on death of employees with representation, children pension or disablement benefits. To fill the lacunae in the old scheme, the Employees’ Provident Funds and Miscellaneous Provisions (Amendment) Ordinance 1995 was promulgated by the President of India, dated 5-1-1996 amending the Act w.e.f. 16-11-1995 conferring power on the Central Government to frame a suitable scheme incorporating provisions for superannuation pension, retiring pensions permanent disablement pension to employees and widow or widow’s pension, children pension or orphan pension payable to beneficiaries of such employees in the event of death. Upon introduction of the Employees’ Pension Scheme 1995, the Employees Family Pension Scheme, 1971 got merged with the new pension scheme and ceased to operate. The new scheme provides for comprehensive pensionary coverage to the member as a income security in their old age and also in the event of their invalidity. The Scheme provides survivorship benefit to the family upon the death of the member. The Scheme is applicable to all factories and other establishments to which The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 applies.

(1) The Scheme called the Employees’ Pension Scheme is to provide for,—

(a) superannuation pension, retiring pension or permanent total disablement pension to the employees of any establishment or class of establishments to which this Act applies; and

(b) widow or widower’s pension, children pension or orphan pension payable to the beneficiaries of such employees.

(2) Notwithstanding anything contained in Section 6, there shall be established, as soon as may be after framing of the Pension Scheme, a Pension Fund into which there shall be paid, from time to time, in respect of every employee who is a member of the Pension Scheme:

(a) such sums from the employer’s contribution under Section 6, not exceeding eight and one-third per cent of the basic wages, dearness allowance and retaining allowance, if any, of the concerned employees, as may be specified in the Pension Scheme;

(b) such sums as are payable by the employers of exempted establishments under Subsection (6) of Section 17;

(d) such sums as the Central Government may, after due appropriation by Parliament by law in this behalf, specify.

(3) On the establishment of the Pension Fund, the Family Pension Scheme (hereinafter referred to as the ceased scheme) shall cease to operate and all assets of the ceased scheme shall vest in and shall stand transferred to, and all liabilities under the ceased scheme shall be enforceable against, the Pension Fund and the beneficiaries under the ceased scheme shall be entitled to draw the benefits, not less than the benefits they were entitled to under the ceased scheme, from the Pension Fund.

The pension fund shall vest in and be administered by the Central Board as specified in the pension scheme.

The Pension Scheme may provide for all or any of the following matters specified in Schedule III.

Matters for which Provision may be made in the Pension Scheme (Schedule III)

1. The employees or class of employees to whom the Pension Scheme shall apply.

2. The time within which the employees who are not members of the Family Pension Scheme under Section 6A as it stood before the commencement of the Employees’ Provident Funds and Miscellaneous Provisions (Amendment) Ordinance, 1995 (hereinafter, in this Schedule, referred to as the amending Ordinance) shall opt for the Pension Scheme.

3. The portion of employers’ contribution to the Provident Fund which shall be credited to the Pension Fund and the manner in which it is credited.

4. The minimum qualifying service for being eligible for pension and the manner in which the employees may be granted the benefit of their past service under Section 6A as it stood before the commencement of the amending Ordinance.

5. The regulation of the manner in which, the period of service for which no contribution is received.

6. The manner in which employees’ interest will be protected against default in payment of contribution by the employer.

7. The manner in which the accounts of the pensions fund shall be kept and investment of moneys belonging to pension fund to be made subject to such pattern of investment as may be determined by the Central Government.

8. The form in which an employee shall furnish particulars about himself and the members of his family whenever required.

9. The forms, registers and records to be maintained in respect of employees, required for the administration of the Pension Scheme.

10. The scale of pension and pensionary benefits and the conditions relating to grant of such benefits of the employees.

11. The manner in which the exempted establishments have to pay contribution towards the Pension Scheme and the submission of return relating thereto.

12. The mode of disbursement of pension and arrangements to be entered into with such disbursing agencies as may be specified for the purpose.

13. The manner in which the expenses for administering the Pension Scheme will be met from the income of the Pension Fund.

14. Any other matter which is to be provided for in the Pension Scheme or which may be, necessary or proper for the purpose of implementation of the Pension Scheme.”

Employees Pension Fund

(1) From and out of the contributions payable by the employer in each month under Section 6 of the Act or under the rules of the Provident Fund of the establishment which is exempted either under clauses (a) and (b) of Sub-section (1) of Section 17 of the Act or whose employees are exempted under either paragraph 27 or paragraph 27A of the Employees’ Pension Fund Scheme, 1952 a part of contribution representing 8.33 per cent of the Employees’ pay shall be remitted by the employer to the Employees’ Pension Fund within fifteen days of the close of every month by a separate bank draft or cheque on account of the Employees’ Pension Fund contribution in such manner as may be specified in this behalf by the Commissioner. The cost of the remittance, if any, shall be borne by the employer.

(2) The Central Government shall also contribute at the rate of 1.16 per cent of the pay of the members of the Employees’ Pension Scheme and credit the contribution to the Employees’ Pension Fund :

Provided that where the pay of the member exceeds rupees fifteen thousand per month, the contribution payable by the employer and the Central Government be limited to the amount payable on his pay of rupees fifteen thousand only.[G.S.R.609(E)),dated 22nd August, 2014]

(3) Each contribution payable under sub-paragraphs (1) and (2) shall be calculated to the nearest rupee, fifty paise or more to be counted as the next higher rupee and fraction of a rupee less than fifty paise to be ignored.

(4) The net assets of the Family Pension Scheme, 1971 shall vest in and stand transferred to the Employees’ Pension Fund.

Payment of contribution

(1) The employer shall pay the contribution payable to the Employees’ Pension Fund in respect of the member of the Employees’ Pension Fund employed by him directly or by or through a contractor.

(2) It shall be the responsibility of the principal employer to pay the contributions payable to the Employees’ Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor.

Note: 1. The Central Government through Notification Nos. G.S.R. 149, dated 3rd September,2010 has amended the Employees’ Pension Scheme,1995 by the Employees’ Pension (Amendment ) Scheme,2010 laying down special provisions in respect to the International worker.

2. The Scheme has been further amended by Notification Nos. G.S.R. 745(E), dated 5th October,2012 (w.e.f.5-10-2012).regarding determination of eligible service in respect of International Workers.

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