Government sources told ET that while the EPFO has agreed to the transfer of the corpus related to provident fund, it is the pension scheme where it is seeking the details. The EPFO has asked Tata Motors to conduct a proper audit of its books and records of the pension funds while rejecting the company’s right to surrender the exemption status.
Tata Motors did not comment.
Paragraphs 38 and 39 of the Employee Pension Scheme allows the government to grant exemption to an establishment from the operation of the pension scheme. The EPFO wants the criteria under this section to be complied with before it allows the company’s plea, an official said.
Tata Motors had incurred losses for three consecutive years (2019-20, 2020-21 and 2021-22) and sought automatic cancellation of the pension fund exemption, offering to fund the additional liability estimated through actuarial valuation. In 2019, the company made an application to surrender the exempted pension fund effective October 1 that year. The process has not concluded yet.In November 2022, the Supreme Court ruled that those who were members of a statutory pension fund as on September 1, 2014, can exercise a joint option with their employer to contribute to their pension fund beyond the statutory limit and be eligible to draw their pension calculated based on the last five years’ average salary.The company has stated in its annual report that it received various representations from employees (past and present) to extend the pension benefits to them as well. “To continue to serve the best interests of all stakeholders and to seek a finality on this matter, and avoid long-drawn litigation, after careful consideration, the company has accepted and approved the joint options on the Employees’ Provident Fund Organisation portal, along with a communication to the EPFO that the company shall fund the additional liability estimated through actuarial valuation. Accordingly, a provision of ₹691.07 crore has been made during the nine months ended December 31, 2023, which has been disclosed as an exceptional item,” the report stated.
The EPFO, however, redirected all the joint applications to the company’s pension trust, following which it filed a writ petition in the Delhi High Court seeking directions to EPFO to immediately start administering its pension fund and not to reject the joint applications. “The trade unions have also jointly filed another writ petition for expediting the transfer of pension fund corpus and accepting the joint applications of the employees,” it said.
The matter is scheduled for hearing on August 8.
On July 9, the Delhi HC directed the EPFO to file its affidavit within two weeks and asked the company’s counsel to respond to the affidavit within a week thereafter. “The counsel for the EPFO has sought two weeks’ time to file a counter affidavit,” said a government official. “The labour ministry has also been made a party to the case but they are yet to respond on the issue,” the official said.
