Pension Eligibility Dilemma: Can a Suspended Employee Still Qualify?

All Respected Seniors,

Please guide me on the matter below. Suppose an employee joined a company on 01-04-1979 and was suspended on 10-11-1996 due to some misconduct. The inquiry continued, the charges were proven, and he was accordingly terminated on 12-06-2001. During the suspension, a suspension allowance was paid to him.

Pension Scheme Eligibility Inquiry

Now, my doubt pertains to the applicability of the pension scheme to him. Can you guide me on whether he was eligible for a pension under the Act? If so, how?

Thanks in advance.

Yes, he will be eligible for PF (Pension) in case of a different type of exit as well because PF deductions are made from his monthly salary during his tenure. He will have the full right to claim it back as per the statutory norms.

Regards,
Amith R.

If he has completed 10 years of continuous service, then he is eligible for Family Pension.

Regards

Under Section 2(b) of the EPF & MP Act, Basic Wages - subsistence allowances paid to suspended employees do not constitute wages and are not liable for the deduction of Provident Fund. However, subsistence allowance is considered part of wages under Section 2(VI) of the Payment of Wages Act and Clause 22 of Section (2) under the ESIC Act; hence, ESIC deduction is permissible on subsistence allowances.

Thank you.
Regards

If, as per the act, PF deduction is not applicable, then how does the question of Pension arise? Please clear my doubt. I am a beginner in Payroll.

Regards,
Archana G. Katakdhond

The question of pension arises due to the length of service of the employee. The employee is already covered under The Employee Family Pension Scheme, 1971, and before suspension, his service tenure was more than 10 years. Hope your doubt is clear.