The Supreme Court on Friday upheld the validity of the Employees Pension (Amendment) Scheme of 2014 but quashed the threshold limit of Rs 15,000 monthly salary for joining the pension fund.

The 2014 amendment had capped the maximum pensionable salary (basic pay plus dearness allowance) at Rs 15,000 per month. Prior to the amendment, the maximum pensionable salary was capped at Rs 6,500 a month.

A bench of Chief Justice UU Lalit and Justices Aniruddha Bose and Sudhanshu Dhulia, however, read down certain provisions of the scheme.

The judgment by a three-judge Bench led by Chief Justice of India U.U. Lalit came in an appeal filed by the Employees Provident Fund Organisation challenging decisions of the Kerala

Rajasthan and Delhi High Courts quashing the 2014 amendments on "determination of pensionable salary" under the Employees Pension Scheme (EPS) of 1995.

The court held that the amendments to the pension scheme notified on August 22, 2014 would apply to the employees of “exempted establishments” in the list of the Employees Provident Fund Organisation (EPFO)

The corpus of the pension fund was to be constituted by transferring 8.33 per cent out of the employer's contribution (12 per cent) under Section 6 of the Act.

A provision added to the scheme with effect from March 16, 1996 granted an option to the employer and the employee to contribute more amounts to the pension fund at the rate of 8.33 per cent of the basic salary drawn by the employee.