The Employees’ Provident Fund Organization (EPFO) has issued new instructions to its field workers following earlier circulars on pensions following the November Supreme Court ruling. The directive called for a re-examination of cases of workers who received higher pensions based on actual wages and who retired before September 2014 but had not yet opted for a higher-wage pension with the pension fund.
A circular was issued in early December with detailed instructions for employees who had paid higher pensions on actual wages, but the provident fund’s offices rejected their application. Details for other members who have retired or entered service after the September 1, 2014 deadline are awaited.
The latest circular states that “to stop any payments for employees who retired prior to September 1, 2014 without exercising an option under Section 11(3) or the pre-modified plan and were granted a pension for receive higher wages, their cases must be re-examined to ensure that they will not be granted a higher pension from the month of January 2023″. “Pension may be reset immediately to pension up to a ceiling of Rs 5,000 or Rs 6,500 in such cases,” it said.
The circular has raised concerns about lower pension benefits for EPF subscribers who previously received a higher pension payment based on actual wages higher than base wage. Officials said such a circular, with retrospective effect, could lead to further legal requests on the issue and lead to administrative delays in delivering pensions under the new standards. The EPF has instructed its officials to provide the retiree with advance notice and an opportunity for the subscriber to demonstrate choice of option before any pension entitlement is changed.
“Furthermore, any recovery that might arise after such an overhaul should be done in a phased and persuasive manner,” it said.
“Extreme care should be taken to identify those instances where a higher pension has been granted as a result of a court ruling. In such cases, a favorable decision must be obtained from the relevant court, invoking the Hon’ble Supreme Court’s decision of 04/11/2022, before suspending/restoring the pension up to the ceiling of Rs. 5000 or Rs 6500,” it said .
Last month, the All India EPF Staff Federation wrote to the Central Provident Fund Commissioner (CPFC) for clarification on details including the formula used to calculate the pension and the options available for subscribers who retired after September 2014. On November 4, SC had ratified the Employees’ Pension (Amendment) Scheme, 2014, which offers EPF members who have taken advantage of the EPS another opportunity to opt for a higher pension over the next four months. Employees who were already EPS members as of 1 September 2014 have the option to contribute up to 8.33 per cent of their ‘actual’ salary – as opposed to 8.33 per cent of pensionable salary which is capped at Rs 15,000 monthly to contribute pension said.
