LOan from Pension Fund
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 June 2011
We have got contributory pension scheme for our Employees where in the Employees contribute major portion to the fund. The purpose of the fund is to pay pension to Employees on retirement. Trust is created for Workers cadre and there is no trust for the Managerial cadre. The fund is managed by an Insurance Company. Now some of the Employees are demanding Loan from their Contribution to the fund as they are in urgent need of the money. The Insurance Company is not willing to pay the Loan. The issue has become an IR problem for the Company. Can any one guide us about the legal position in the matter, i.e. whether our Employees are right in demanding Loan from the Pension fund. Whether the Insurance Company is duty bound to pay the loan to our Employees from the fund since the fund is only managed by the Insurance Company on behalf of our Trust/ Company.
29 June 2011
superannuation trust funds are not bound to honour request for loan, as the funds are not appropriated in individual names, but the gross corpus is there in name of all workers jointly.
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