Pension and gratuity

Read the acts.

Pension:
P shashikumar v UOI: amendment came in 2018. Questioned in this case.
Excluded and exempted organizations: section 17, Employees’ pension scheme.
Gratuity:
Employees under state government and central government are exempted under payment of
gratuity act.
Gratuity has a specific limit – 20 lakhs is the maximum amount of gratuity
Application of payment of gratuity act: organizations with 10 or more people
Private teachers association case: led to the 2009 amendment
Members of municipalities and other local bodies fall within the ambit of the act.
Calculation of gratuity:
In a year of continuous service (190 days in case of mine in a year; 240 days in a year and 120
days in 6 months in other cases), 15 days’ wages would go to gratuity.
15 days wages * No. of years of continuous service = Gratuity
15 days wage = (Wages / 26) * 15
Seasonal establishment: 7 days wages instead of 15 and also (multiplied by no. of seasons)
Gratuity = 7 days wage * no. of seasons
Forfeiture of gratuity: loss to employer or removed from service on matters proved against him
on matters relating to moral turpitude
Employer must give notice to employee stating amount of gratuity before providing gratuity. If
there is dispute regarding amount, employer has to deposit the amount.
Section 4A: calls for compulsory insurance. Was brought in via an amendment. Liability of
payment must be insured with LIC or other insurance.
If delay in payment of gratuity, employee can claim simple interest at a rate decided by the
central government.
Employee has to give nomination within 1 year of service, as to who will be nominated as his
dependent in case of death or disablement.
Key amendments in 2014 in the EPF scheme:
Increase of wage ceiling to 15,000
After 2014, employees joining cannot claim under voluntary contributory benefit scheme
Pension is calculated on average monthly pay of last 60 months.
If the employee is getting salary above wage scale, then he is required to contribute an additional
1.16% - this was challenged in P shashikumar case.
According to Kerala HC, the amendments to the EPF scheme were declared unconstitutional.
The amendment with respect to voluntary contributory benefit scheme was declared
unconstitutional on the ground of Article 14.
Once you have attained superannuation, you can limit the payment of pension till 60 years of age
at the rate of 4%.
Mode of recovery of money due from employer:
You can recover amount from employer
Types of pension:
Member pension
Disablement pension
Pension to dependents in case of death