Update for EPS 95 Pensioners | Report of the Committee on Sub-ordinate legislation 2015-16, 16th Lok Sabha (12th Report) presented in Lok Sabha on 10.8.2016

COMMITTEE ON SUBORDINATE LEGISLATION
(2015-2016)
(SIXTEENTH LOK SABHA)
TWELFTH REPORT
Amendment to Employees’ Pension Scheme, 1995
(PRESENTED TO LOK SABHA ON 10.8.2016)
LOK SABHA SECRETARIAT
NEW DELHI

August, 2016/Sravana, 1938 (Saka)

…………………….. Concluding Extracts……………..

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1.18. The Committee also note that by amending the norms of calculating the pension of a person who has joined the pension scheme of 1995 based on 12 months average salary to 60 months average salary w.e.f. 1 September, 2014 amounts to retrospective application of the amendment to the subscribers and adversely affecting their interests. In the considered view of the Committee, such an amendment cannot be termed as a good piece of subordinate legislation which is prejudicially affecting a large number of beneficiaries. Moreover, the Committee on Subordinate Legislation have time and again emphasized that as far as possible, retrospective application of rules should be avoided and if at all it is to be implemented then it must be ensured that it does not have the effect of adversely affecting the interests of anyone and in all such cases, a certification must invariably be given by the issuing authority in this regard. In this regard, the attention of the Ministry is invited to the following recommendations of the Committee on Subordinate Legislation (Para 11.7.4 (ii), Chapter 11 of Manual of Parliamentary Procedures in the Government of India of Ministry of Parliamentary Affairs):- “ In cases where the parent Act provides for giving of retrospective effect, the rules framed thereunder should be accompanied by an explanatory note setting out therein the reasons and circumstances which necessitated the giving of such retrospective effect.

The note should also indicate that the interests of no one will be prejudicially affected by giving retrospective effect. In cases where the parent Act does not provide for giving retrospective effect but retrospective effect is proposed to be given due to unavoidable circumstances, prior action should be taken to clothe it with legal sanction for the purpose” Even if a provision for retrospective effect is contained in an Act of Parliament, the Committee feel that it could never be the intention of Parliament that such delegated Legislation would be exercised in any kind of unreasonable manner and opposed to public policy by prejudicially affecting the interests of large number of subscribers of the scheme. Moreover, the step leading to loss of pension to such a vulnerable group militates against the espoused philosophy of "Sabka Saath Sabka Vikas".

1.19. The Committee wish to caution that Employees Pension Scheme is a social Security Scheme and it should always be the endeavour of a popular Government to judicially exercise the power of subordinate legislation for the further betterment of the welfare of the society instead of causing hardships and economic despair. The Committee find the above mentioned amendment which has the effect of drastically reducing the pension of the subscribers totally unacceptable. No justification has been placed before the Committee by the Government in suddenly arriving at an extremely unreasonable period of 60 months from the 12 months for calculation of pension. The Committee are not at all convinced with the plea of the Government that the same has been done on the basis of the Actuarial Valuation Report. The Committee believe that at the time when this Scheme was initially conceived, the Government must have taken into consideration all the pros and cons including the financial implications and the social objectives while fixing the period of 12 months for calculating the pension. Further, this also raises the question about the credibility of the actuarial assessment who were unable to calculate the amount of loss. Moreover, the Ministry have failed to place before the Committee any information regarding the kind of financial constraints being faced or their quantum etc. so as to justify such a deleterious change in the criteria leading to enormous financial loss and hardship to the intender groups.

1.20 In the above backdrop, the Committee strongly recommend that the earlier criteria for calculating the pension amount on the basis of the average salary of 12 months must be restored in case of atleast all such employees who became members of Employees Pension Scheme prior to the Notification dated 22-08-2014 effective from 1.9.2014. The criteria of 60 months for calculation of pension and deduction of an additional 1.16% of pay exceeding Rs. 15000/-, could be made applicable to only those employees who had joined Employees Pension Scheme after the Notification dated 22- 08-2014 effective from 1.9.2014 after suitable modifications as the Committee find little justification for such a drastic change in the criteria.
The Committee would like to be apprised of the action taken in this regard within 3 months of the date of presentation of this Report.

DILIPKUMAR MANSUKHLAL GANDHI
Chairperson, Committee on Subordinate Legislation
New Delhi:
August, 2016
Sravana, 1937 (Saka)