High Court against forced pension scheme

Fund of retired employees can be transferred only with consent

August 23, 2012 11:42 am | Updated 11:42 am IST - Kochi

A Division Bench of the Kerala High Court on Wednesday held that fund of the retired and serving cooperative bank employees kept in the Employees Provident Fund Scheme and Employees Pension Scheme can be transferred to the Kerala State Cooperative Employees Pension Board only with the consent of employees.

The Bench comprising Justice C.N. Ramachandran Nair and Justice C.K. Abdul Rehim made it clear that State government or banks could not demand transfer of fund of employees who were members of the Employees Provident Fund Scheme 1952 and Employees Pension Scheme 1995 to the pension board.

Those who opted for transferring membership from the provident fund pension schemes to the board’s scheme could apply for the same and on the request, the Employees Provident Fund Commissioner should transfer funds.

The court passed the order while disposing of an appeal filed by the board against a single judge’s order holding that funds of retired and serving employees could not be compulsorily transferred to the board.

The single judge’s order came on a writ petition filed by employees of a district cooperative bank challenging a proposal to transfer the funds of the members of district cooperative banks as well as the State Cooperative Bank to the board.

The petitioners contended that the funds of retired employees as well as the existing employees who continue to be members of the Employees Provident Fund Scheme 1952 and the Employees Pension 1955 could not be compulsorily transferred to the board.

The court observed that after the establishment of the self-financing pension scheme under the board in 1993, the provisions of EPF Act did not apply to the establishment.

However, the provisions of the Kerala Cooperative Societies Act did not provide for compulsory transfer of funds of retired and serving employees to the board. The court said that the employees were free to join any scheme which gave them better benefits.

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