Supreme Court Verdict on EPFO Pensions: Does It Affect Exempted Funds?

As per the Supreme Court verdict, EPFO should provide a pension based on actual salary for employees and companies who choose to opt for it. A transfer of funds should be made to accommodate this by EPFO. Can anyone clarify whether this is applicable for Exempted Funds?

Application of Supreme Court Ruling on PF Contributions

This ruling applies only to employees of establishments who have paid the PF contributions on actual salary without restricting the PF qualifying salary to Rs 6500.

For example, XYZ Ltd is an establishment that used to contribute the employer's share of PF on the actual salary. Mr. B's PF qualifying salary was Rs 10,000, and the employer's share of 12% was deposited like this: Rs 541 (8.33% of Rs 6500) to the Pension Fund and the balance Rs 659 (i.e., 1200 minus 541) to PF along with the employee's share of Rs 1200. This means that although the employer's share was Rs 1200, the employer was only permitted to contribute Rs 541 to the Pension Fund. At the same time, a higher amount was contributed to the Provident Fund, i.e., Rs 659 as against Rs 367 (3.67% of Rs 10,000).

As per the Supreme Court verdict, the PF Organization will have to rearrange the funds by transferring the additional amount of Rs 292 (Rs 659 minus Rs 367) from the PF account to the Pension account so that the Pension Fund will become equal to 8.33% of Rs 10,000 or Rs 833 (i.e., 541 already deposited plus Rs 292 now being transferred). By doing this, the Provident Fund will become Rs 367. If you have already withdrawn the PF, i.e., Rs 659, obviously with your own share of Rs 1200, you have to refund Rs 292 to the Provident Fund Organization, who will put this amount in your Pension Fund account to recalculate your pension.

Formerly, the Pension qualifying salary was Rs 6500, but since the employer had contributed PF on a higher salary, i.e., Rs 10,000, this will become the Pension qualifying salary. Obviously, the pension will increase. If your PF qualifying salary had been even higher, say Rs 60,000 or Rs 100,000, the pension would also go up.

Impact of 2014 Amendment on Pension Calculation

However, with the last amendment of 2014, the PF Organization has put a ceiling on the pension contributing salary to Rs 15,000. Since then, this has become Rs 15,000. With this amendment, the pension calculating formula has also been changed. Now, the actual contribution or Rs 15,000, whichever is lower, will be the base for pension calculation, and for the period prior to September 2014, the average of the pension qualifying salary for 5 years will also be taken. In this calculation, we can make use of the Supreme Court verdict and put the same PF contributed salary as the Pension qualifying salary.

I must say that employees of establishments who do not even think of giving PF to their employees and those who give it just for statutory compliance will not get the benefit of the verdict because they will contribute just what the law states, i.e., contribute PF on Rs 6500 or Rs 15,000, as the case may be.

Thank you for your valuable update. Is there any difference between PF funds managed by EPFO and PF funds managed by Trustees? Currently, EPFO is not allowing companies whose PF is managed by Trustees to be included under the purview of the Higher pension ruling. They are only permitting unexempted establishments. Could you please provide further insight into this issue?

The present ruling does not make it applicable to members of exempted establishments. However, there will be direction in this regard very soon.

Thank you very much for your valuable information. I have been drawing a pension under the EPF & MP Act since 01/07/2014. My PF salary, on which PF contribution was being deducted prior to my retirement, was much higher than the pension wage ceiling (it was Rs. 6500/- at the time of my retirement). Is there any circular issued by the PF authority inviting applications from PF pensioners for claiming a pension on the actual PF wage by depositing the differential pension contribution? Can you please enlighten me in this regard?

Thanking you, with regards,

S.K. Hota

PF Organisation is keeping silent on these matters. Yesterday, the Supreme Court has said that we should wait until the cases pending in Kerala High Court are decided. I think we may have to wait for another couple of months to get clarity.

EPFO Circular and Court Order on Pension

EPFO has already issued a circular on 23.03.2017, which is attached. However, regional offices are going slow on this, citing a lack of gazette publication and verdicts on some more cases pending in courts. Ultimately, they have to pay the revised pension. The court, in its order, has already reprimanded EPFO for harassing subscribers. EPFO operates under the assumption that their function is to deny benefits to subscribers, whereas it should be to provide as much benefit to subscribers as possible.

Exempted vs. Non-Exempted Categories

Though the Supreme Court order does not distinguish between exempted and non-exempted categories, EPFO is illegally trying to exempt the 'exempted category' (the funds managed by the employers themselves). Since the Supreme Court order is specific on giving benefits to all, it is only a matter of time before EPFO stops this illegal discrimination. Various pensioners' organizations have already taken this up, and an online petition to the Labour Minister is ongoing. I request everyone on this board to google the petition and sign it.

Increased Pension for Current Pensioners

Increased pension is also applicable to those who are already drawing a pension. As per the circular, there is a specified form that is not available online but has to be obtained from local EPF offices. Currently, in line with EPFO's mindset, they insist that only those who apply will be considered. Unofficially, they are also banking on pensioners not being able to pay the EPS contribution already returned along with EPF accumulation. This difference will have to be first paid to EPFO, but since the arrears of pension they have to give will far exceed the excess contribution, it is only common sense to deduct the excess contribution from arrears and pay the balance. However, EPFO's mindset will not allow that, and we may have to approach courts again for that. In short, there could be delays, but EPFO will be forced to implement the court order; maybe EPFO may go bankrupt in the long run or may have to depend on government funding. The government will be forced because the government only passed the law which the SC has rightly interpreted now.

I request everyone on this board, pensioners, and those who are still employed to go for it. Pensioners, go to the local office and submit the specified form based on which EPFO will inform you about the excess contribution to be paid, and EPFO will pay you arrears starting from the commencement of your pension. Please remember that your spouse/nominee will get half the enhanced pension; just go for it. Next week I will post the specified form.

Recent Developments in Pension Calculations

Very recently, the Central PF Commissioner issued a circular to all RPFCs, stating that they should be ready to calculate the pension of higher wages at the earliest. It has also been observed that officers should not delay files by claiming they are awaiting clarification from the Head Office. However, the challenge lies in the fact that the software used to calculate pensions is still pending modification. As a result, a significant amount of manual calculations are currently necessary to determine the pension amount. It is important to note that no officer is willing to take the risk of manual calculations.

Please find attached a directive addressed to the Regional PF Commissioners.

Dear All,

Is there any recent circular where exempted PF employees can claim for revised pension amount?

Thank you.

My last salary on retirement on 30/06/2013 was Rs. 10,000/-. I have applied for a higher pension. So far, the pension has not been revised. My doubt is whether the average salary considered for higher pension calculation is based on the last 12 months or the last 60 months.

Thanks, Madhu K. The issue of exempted employees was under litigation, and at least the Kerala HC has recently ruled in favor of the exempted category. EPFO, in their usual eagerness to deny benefits to subscribers, had wrongly interpreted the SC judgment to exclude exempted funds.

Increase in Minimum Pension

I also learned that a move to increase the minimum pension to ₹5000/7500 is also in the final stages and is being delayed by the government, though agreed. Now I learn that a morcha of pensioners is going to protest in Delhi on Nov 18 or 28 or some day in Nov.

I retired on 31.3.2015 and started receiving a pension from EPF on 3.10.2015 upon attaining 58 years of age. From 1993 until 2005, I was in an exempted company. Thereafter, with a two-year gap, I joined an unexempted company until my retirement on 31.03.2015. Throughout my employment, my contribution was higher than the ceiling limit. However, since I was unaware that I needed to opt for a higher pension, I am currently receiving a pension of Rs 2000/-. I would like to inquire about my eligibility for an increased pension in light of the Supreme Court judgment, Kerala Court judgment, and the orders issued by the Head Office of the EPF department. Alternatively, I would appreciate guidance on the necessary steps to rectify this missed opportunity.

Since you have contributed to the provident fund on a salary above the statutory ceiling of Rs 6500, you will be entitled to a higher pension. Upon withdrawal of your PF accumulations, you would have received the amount your employer paid to the provident fund in excess of the amount payable had it been limited to 12% of Rs 6500. That amount should be paid back to EPFO, and then your pension should be recalculated based on the actual PF contributing salary.

Example Calculation

Let us work with an example assuming a salary of Rs 100,000. The PF contribution is not restricted to Rs 6500; the employer was contributing based on Rs 100,000. This means your employer's contribution to PF was Rs 12,000, as opposed to Rs 780.

Out of this Rs 12,000, only Rs 541 (6500 X 8.33%) was deposited into the Pension Fund. The remaining amount of the employer's contribution, i.e., Rs 11,459, was deposited in your Provident Fund account. If the PF authorities had accepted a pension fund contribution rate of 8.33% on the actual salary, i.e., 8.33% of Rs 100,000, the contribution to the pension fund would be Rs 8,333. In that case, the employer would be paying Rs 8,333 to the pension fund and the remaining Rs 3,667 (Rs 12,000 minus Rs 8,333) to the Provident Fund.

Recalculation of Pension

In the first case, the employer's contribution to the PF account would be Rs 11,459, and you have withdrawn that amount with interest. Now, the second case should be applied. To receive a higher pension, you should have contributed based on the higher salary, resulting in a lower employer contribution to the provident fund, i.e., Rs 3,667. This implies that although you have taken back Rs 11,459, you should pay back Rs 7,792 (Rs 11,459 minus Rs 3,667) and then recalculate the pension as if the pensionable salary is Rs 100,000.

Challenges in Implementation

The PF authorities mention that they need time to calculate how much employees should pay back, as there is no system for it in the current software. While it may seem fine when calculated for one scenario, it becomes complicated when factoring in the interest part. In cases where the salary is substantial, the amount received upon withdrawal of PF accumulations would also be high, and repaying it could pose a significant burden.

EPF Pension Scheme Clarification

There was a circular from EPFO on 22-01-2019 entitling all EPF members to join the EPF pension scheme based on the actual salary with the option of paying the additional amount with arrears and interest. Since there is no mention of Exempted/Non-Exempted organizations in this EPFO order, is this applicable to all EPF eligible members?

Supreme Court Hearing on EPF Pension Scheme

When is the next Supreme Court hearing on the EPF pension scheme, as many review petitions are pending in the Supreme Court? It was scheduled for 25-01-2019, but this date has been postponed again. Even the final verdict of the High Court of Kerala has come in favor of the EPF members.

Regards, Satheesh Kumar.P ITI Limited, Palakkad

Dear Madhuji, This is with reference to my query dated 17/12/2017 and your reply dated 19/12/17 in this discussion. After the issuance of circular no. 2896 dated 8/6/18 by Addl. CPFC (Pension), Mr. R.M. Verma, EPFO Headquarters, Delhi, I sent reminder emails at 10-20 days' intervals to all concerned RPFCs, with a copy to ACPFC, Odisha Zonal Office, and CPFC, Delhi, to inform me of the differential amount (pension fund contribution on my actual wage/salary minus pension contribution already deposited on my wage/salary up to statutory ceiling) I have to deposit with EPFO and the actual amount of my revised pension per month.

Only on 4th March 2019, I received a response from the RPFC Office about the total refund amount to EPFO in the form of a DD towards the differential amount of pension contribution, together with interest accrued till the end of the month. Upon deposit of the said amount, I would be paid a revised pension, as informed by the said office.

Points to be clarified

1. When I calculated the amount of my arrear pension for 69 months by simply multiplying the monthly arrear pension amount by 69, without taking into account any interest for the past 69 months, the amount arrived at is 20 thousand more than the amount I am asked by EPFO to deposit. Why is EPFO not adjusting the amount of my refund to them against the total arrear pension I am to get? Why should I incur additional charges by way of DD on a huge amount of refund? Are they not doing injustice to a retired senior citizen? Is such action justified and legally sustainable?

2. As the PF authority is collecting interest with retrospective effect on the amount of my refund against higher pension contribution till today, is it entitled or not to pay me interest on my arrear pension amount from the date of my retirement till date?

Your considered opinion on the matter is highly solicited.

With Regards,
S.K. Hota,
Bhubaneswar
Dt-9th Mar, 2019

Request for EPFO Circular and Action Against Injustice

Sathish ITi, please attach the circular dated 22/01/19, or if anyone else has a copy, please post it. I have, on several occasions, written on this site about the injustice SK Hota has mentioned, but there has been no response from our group. It is time we unitedly fight for this, even if we have to file a PIL.

I have written to the BJP cyber cell regarding this because they sent out a mail asking for input for the 2019 election manifesto. The BJP minister, Javdekar, who demanded a minimum pension of Rs 3000, remained silent despite being in a position within the ministry that could have addressed the issue. The minister, Kushwah, who negotiated with retired employees, made some favorable remarks but later on TV stated that EPFO can't provide for every retired employee, only those who have received a verdict from the SC. He also mentioned that the government is working on a minimum pension of Rs 2000, as if it would be a significant favor. Now, he has resigned on the eve of the MP Rajasthan and MP elections.

EPFO employees seem to have a mindset that their duty is to deny or delay anything advantageous to EPFO members. Dear Mr. Hota, did you apply in the specified Form 26 and 3A, or did you just write to EPFO? Once again, I request anyone to post the EPFO circular dated 22/01/2019.

I have the circular dated 22/01/19 and the copy of the Kerala HC ruling dated 12/10/18, both are attached. Kerala HC has upheld the petitioner employees' contentions and rejected the Government's contention. It reads, "For the foregoing reasons, the petitioners are entitled to succeed. The writ petitions are all allowed as follows:

i) The Employee's Pension (Amendment) Scheme, 2014 brought into force by Notification No. GSR. 609(E) dated 22.8.2014 evidenced by Ext.P8 in W.P.(C) No. 13120 of 2015 is set aside;

ii) All consequential orders and proceedings issued by the Provident Fund authorities/respondents on the basis of the impugned amendments shall also stand set aside. W.P.(C). 13120/2015 & con.cases

iii) The various proceedings issued by the Employees Provident Fund Organization declining to grant opportunities to the petitioners to exercise a joint option along with other employees to remit contributions to the Employees Pension Scheme on the basis of the actual salaries drawn by them are set aside.

iv) The employees shall be entitled to exercise the option stipulated by paragraph 26 of the EPF Scheme without being restricted in doing so by the insistence on a date.

v) There will be no order as to costs. Sd/-"

Hence, there was no reason to withdraw the circular. If we keep quiet, the Government's current and future actions will take us for a ride.

Dear Mr. Raghvant, since I have retired from service prior to September 2014, I am entitled to a higher pension as per the Apex Court's order; there is no doubt about it. I have just received a letter from EPFO requesting the deposit of the refund amount to receive the higher pension effective from my retirement date, i.e., 1/7/2013.

Clarification on EPFO's Request

I am seeking clarification on whether EPFO is justified in asking me to deposit the refund amount without adjusting it from my arrear revised pension amount. The EPFO circular dated 22/1/2019 is attached.

With Regards,
S.K. Hota

Dear Mr. SK Hota, you are lucky that you have at least received this letter. Congratulations and go ahead. Did they inform you of the enhanced pension amount? What is the difference between arrears to be paid and arrears of pension you will receive (you will get arrears from the date of retirement)? According to me, in your lifetime, you will be able to recover much more than what you pay. Don't forget that your wife will be entitled to half that amount as a pension if anything happens to you (praying to keep you healthy).

Your million-dollar question

If EPFO wanted to be rational, they could have proactively calculated the arrears and enhanced pension of each pensioner and could have offered to adjust arrears and informed each and every pensioner. Unfortunately, EPFO thinks that making the lives of pensioners as miserable as possible is their job function. All the details that EPFO is asking for processing your enhanced pension, like form 26 and 3A and its attachments, are already available with EPFO.

Request for details

Now, I request a few details from you:
1. Did you apply in the specified forms 26 and 3A or just send a letter? If you applied with the forms, did you get your employer to sign those forms?

Reason for asking

Why am I asking these? Most of the pensioners must have changed jobs a few times, and some employers may have wound up or been taken over by other companies. In these situations, it is almost impossible to get all the employers to sign these forms. I am in a similar situation; I retired in 2007, 12 years back. In the last employment, a lady with her "Thuglak" reforms stopped paying contributions on full salary. Technically, there is no "employer" in the case of an already retired person. So, if EPFO is subscriber-friendly, they should act proactively as I mentioned.

I request everyone to share their experiences on this enhanced pension so that all retirees can benefit.

Circular of 22/01/2019

As for the circular of 22/01/2019, this has been withdrawn citing a Kerala High Court order. There was no reason to withdraw the circular because the High Court had confirmed employees' entitlement to a higher pension. I have already attached the HC order to my previous post. Now, I am attaching the circular withdrawing the 22/01/2019 circular.

Supreme Court Verdict on EPFO

In view of the Supreme Court verdict reported in TOI today, which finally dismisses all the delaying tactics of EPFO and the government, what action is to be expected? Logically, EPFO should calculate the arrears to be paid and the pension expected for all pensioners, then seek their consent for paying arrears to receive a higher pension. Currently, EPFO is asking for details from pensioners and wants them to be certified by employers, which is practically impossible for people who retired long ago and have changed jobs multiple times. Some employers may have vanished. Above all, EPFO has all the data available with them, based on which they calculated the pension and returned the EPS contribution paid above the ceiling salary. Unfortunately, EPFO is so non-transparent that they don't even intimate how they have arrived at the pension amount and EPF accumulation amount.

TOI report attached.

Sorry, Mr. SKhota, I missed out on the discussion at some point due to some urgent engagement. I understand that refunding the amount drawn from the PF and adjusting the same from the arrears of pension payable are some technical issues.

EPFO Process for PF and Pension Settlement

In EPFO, the wing dealing with PF settlement is separate from the department that processes pensions. The officer who has to issue directions to the Pension department to start processing the pension based on actual salary should first get the amount withdrawn from PF. Once it is received with interest as applicable (the Supreme Court verdict on pension on actual salary has mentioned something about 6% interest payable by the member), he will send the file to the Pension department. That is why they are insisting on that. Anyway, since the Supreme Court judgment has come, they will again take time to study the issue. Therefore, let us wait a little more.

Implications of the Latest Supreme Court Verdict on PF-Contributing Salary

The implications of the latest Supreme Court verdict on employees whose PF-contributing salary is capped at Rs. 15,000 need emphasis. Many think that henceforth it will be their actual salary that will be the base for calculating the pension. This is not true. A higher pension applies only to employees of those organizations that contribute PF on the actual salary without restricting it to Rs. 15,000. Please follow the link for more details. [Blog Link: https://madhu-t-k.blogspot.com/2019/04/pension-based-on-actual-pf-contributing.html]

I am still working in an ICSE school. My PF contribution is based on a salary of Rs. 15,000, but I am actually receiving a higher salary of Rs. 30,000. Do I need to apply for the option of receiving a pension based on my actual salary? If so, how can I go about executing that option?

If your employer agrees to pay PF on ₹30,000, i.e., ₹3,600 per month as against ₹1,800, then you will also be eligible for a higher pension (pension based on ₹30,000). But as pointed out in my blog write-up, neither the EPFO nor the employee can demand the employer to contribute his share of contribution on any amount above ₹15,000.

Employee Pension Scheme: Supreme Court Order

Please advise regarding the recent Hon. Supreme Court Order for the employee pension scheme.

1. In our establishment practices, P.F. deduction is based on the actual Basic Salary (not capped at P.F. salary of Rs. 15,000/-). What action can be taken to ensure all employees benefit from the new pension scheme?

2. What is the pension calculation for employees with more than 20 years of service based on the previous criteria (before the Hon. Supreme Court Order)?

3. What is the pension calculation for employees with more than 20 years of service with a basic salary of Rs. 30,000/- and above?

If you have any references for comparison, please forward them.

Sir,

My employees and management agree to contribute PF contributions at a higher rate of Rs. 50,000 to Rs. 100,000 (basic/DA) effective from 01/04/2019. Currently, we are contributing at the ceiling rate, i.e., Rs. 5,000/Rs. 6,500/Rs. 15,000.

Could you please confirm if my employees will be eligible for a higher pension after contributing for 12 months if they retire?

Thank you.

Supreme Court Verdict on Pensionable Salary

As per the latest Supreme Court verdict, individuals who contribute at a higher salary, such as 50,000 in this example, should receive a pension based on that higher salary as their pensionable salary. The method of calculating the service is not clear, but the verdict specifies that the pensionable salary should be the average of the 12 months' pensionable salary immediately preceding retirement. This implies that even if you contribute at 15,000 throughout your career but contribute 50,000 in the last year, your pension should be based on 50,000! If this is the case, the EPFO will face significant financial losses.

Pension Calculation Method

Pension is calculated roughly as pensionable salary (salary on which PF is deducted) multiplied by pensionable years (years contributed to PF), all divided by 75.

Changes in Pensionable Salary Calculation

Earlier, when the pensionable salary was computed as the last 12 months' average, employers used to give more salary during the last year to help employees. To address this issue, EPFO introduced a 5-year average, which has now been struck down by the Supreme Court.

Current Scenario

Now, the field is open if your employer is willing to give you a higher PF contribution based on a higher salary in the last year of retirement.

Dear Mr. Madhu, I need your professional advice and opinion. I retired in March 2014, and technically, the pension started in Dec 2011 after I attained 58 years of age following 12 years of service in my present organization. My salary for pension deduction was capped at Rs. 6500/-, and accordingly, I paid Rs. 541 at that time. My pension today is Rs. 1075/- per month.

I was contributing to PF based on the actual salary. The last pay drawn in Dec 2011 was Rs. 117400/-. The question is whether I will be entitled to an enhanced pension after remitting the differential amount for the 12-year service period together with interest (6%)? Based on calculations, I might have to pay around Rs. 866941 (considering my then last 5 years' salary and the calculation of 8.33% less Rs. 541, plus interest). The gain, I suppose, is the arrears from Dec 2011 till date, plus the regular enhanced pension of Rs. 20125/- (117400 x 12 / 70). Through this process, I might receive arrears of around Rs. 1690560 (from Dec 2011 onwards) plus interest, which should be approximately 12 lakhs.

Can you kindly confirm my understanding for further action with EPFO, please?

I would like to give my views on your query as follows, based on my experience in getting an enhanced pension from EPFO as per the Supreme Court's verdict:

Eligibility for Enhanced Pension

You are eligible for an enhanced pension/arrear pension as follows:

1. You have contributed to the pension fund on Rs. 6,500 (wage ceiling amount only) for 12 years from 1999 to 2011, whereas you have contributed to PF at 12% on actual salary, with the last month's salary being Rs. 1,17,400 in 2011 (i.e., at the time of attaining 58 years). As you have not mentioned your pensionable service/PF contribution prior to 1999, I am assuming that you were neither a member of EPF/EPS or, if a member, you have withdrawn the PF amount prior to 1999, i.e., before joining your last employer.

2. You have to refund the differential of pension contribution (8.33% of actual salary on which PF at 12% was deducted minus Rs. 541 per month from 1999 to 2011, i.e., for the entire period of your pensionable service with up-to-date interest till the date of deposit calculated at the interest rate declared by EPFO for different years from 1999 to 2019 at monthly rest (e.g., at 12% for the year 1999 ....... at 8.55% for 2019).

3. You will be entitled to receive an enhanced pension at Rs. 1,17,400/70*12 = Rs. 20,126 per month. (This will vary depending on your average of the last 12 months' salary and the actual period of pensionable service) with effect from the date of your retirement in 2011.

4. You will get arrear pension at Rs. 19,141 (Rs. 20,126 - Rs. 1,075) for 12 years x 12 months, which comes to Rs. 27,56,304 (Approx). No interest will be given by EPFO over it.

Regards,
S.K.Hota
Bhubaneswar

Dear Mr. S.K. Hota,

I sincerely thank you for the enlightenment. Yes, prior to 2000, I had withdrawn PF as I was overseas. From May 2000 to March 2014, I was employed as Executive Director in Darcl Logistics Limited when I finally retired. For the purpose of EPFO, I attained 58 years in Dec 2011 when the pension started.

Adjustment of Differential Amount

On the issue of my returning the differential amount and the interest, can the same not be adjusted from receivables? As per your advice, I am working out the statement of my salary from 2000 to 2011 and 8.33% on the same plus interest as you advised. Is there a time frame from EPFO as to when I can get the amount and enhanced pension?

Regards

Dear Mr. S.K. Hota,

I forgot to mention that the arrears I should receive from December 2011 until the present date amount to 7 years, correct? I believe it is not 12 years. Could you kindly provide clarification, please?

Regards

Dear Mr. Madhu.T.K,

I am a retired person, and I have heard that I need to pay off the differential amount (8.33% on salary minus Rs. 541) during the pensionable service with interest. My queries are:

1. What interest element should I consider on the principal sum to be returned to EPFO?
2. Will that be until 31.3.2019, or which date precisely?
3. Will pension arrears have an interest element by EPFO until 31.3.19 or some cut-off date?
4. If my pension arrears receivable are less than the payable amount, will I have to remit the difference to EPFO?
5. If my pension arrears receivable are more than the payable amount, will EPFO give me the difference?
6. What is the timeline you envisage for the above process?

EPFO Calculation Sheet

The 14th March 2019 circular from the Additional Commissioner PF (Pensions) says that the PF department should send a calculation sheet. Are they doing so in your expert opinion, Sir?

Regards

Arrear Pension Details

Yes, you will receive an arrear pension of Rs. 19,141/- (Rs. 20,126 - Rs. 1,075) for 7 years and 4 months (12/2011 to 3/19), which totals 88 months, amounting to approximately Rs. 16,84,408.

Interest on Arrear Pension

Regarding interest on the arrear pension, I have mentioned this in my correspondences with EPFO authorities. However, I have learned from my ex-colleagues that they have not received interest on their arrear pension amounts. I will request the same from the EPFO authority after receiving my arrear pension. Currently, I have deposited the refund amount but have not yet received the enhanced pension/arrear pension.

Adjustment of Refundable Pension Contribution

Concerning the adjustment of refundable pension contribution from the arrear pension, my request for the same has been rejected by the EPFO authority on the grounds that there is no mention of such adjustment in the Supreme Court order. Instead, it is stated that EPFO can request a refund of differential pension contribution with updated interest from pensioners.

The EPFO authority is providing pensioners with a calculation sheet of the refundable amount for the entire period, which I have received.

Regards, S.K. Hota Bhubaneswar

Dear Narasimhan Sir,

I beg your pardon for my absence over the past couple of days, which prevented me from visiting citehr. However, I am pleased to see that our friend SK Hota has provided you with the correct answer. Since pension processing is handled by a separate department that only acts upon directions from the PF department regarding the receipt of refunds, in order to release pensions at revised rates, I do not believe that adjusting the amount payable from the pension arrears would be feasible.

Dear Mr. Madhu TK, thank you for your considered advice, and Mr. S.K. Hota's considered advice on my queries. I am attaching the Madras High Court Judgment of 27.3.19 and some excerpts:

vi) "In cases where the refund of the amount by any employee with interest is higher than the enhanced pension with arrears payable to him, the refund shall be insisted upon. In cases where the refund, after calculation, is lower than the arrears of pension payable to the employee, the same shall be adjusted while disbursing the arrears to the employees concerned."

May this information be helpful.

iii) The employees, namely, the writ petitioners, shall be permitted to exercise their option in terms of Proviso to Clause 11(3) of the Pension Scheme. While permitting this, the EPFO is at liberty to seek the return of the higher Provident Fund contribution received by the respective employees with simple interest at the rate of 6% per annum from the date of receipt of the Provident Fund amount until the date of payment.

You had earlier mentioned 6% interest (simple interest), Mr. Hota mentioned a higher interest rate than this, which may provide some relief.

I look forward to your thoughtful advice.

Regards

I think Hota has provided an interest rate just as an example, not the exact interest rate. What I understand is a 6% per month interest rate. Yes, the Madras High Court ruling applies to exempted establishments as well. The same has been reiterated in the recent Supreme Court verdict too.

Dear Mr. S.K Hota,

Can you kindly advise on how to elicit a proper response from EPFO, Rohtak, Haryana in my case? I have asked them for the calculation sheet, but there has been no response, as is often the case with Government Departments. I have now copied Mr. Rajesh Bansal, HQ Additional PF Commissioner.

Do I have to wait until the May 2, 2019, judgment as the Honorable Supreme Court may need to rule on another SLP filed by EPFO/Ministry of Labor?

Any advice, sir!

Regards

Dear Pensioners and Others,

I happened to come across the EPFiGMS Grievance Management Portal, where you can lodge your grievances. Perhaps this will be helpful. The portal includes a provision in the combo box for enhanced pensions! Upon lodging your grievance, you will receive a prompt acknowledgement number too.

You can access the portal at: [EPFiGMS Grievance Management Portal](https://epfigms.gov.in/Grievance/LodgeSuccessOthers)

Regards,

Dear EPS 95 Pensioners,

For enhanced pension and arrears, the impending Hon'ble SC verdict on 2.5.2019 is crucial. I am confident that the Hon'ble Supreme Court verdict expected on 2.5.2019 will bring more clarity and reprieve to pensioners so that EPFO complies. In this context, I wish to submit to the Ld. Advocates who are fighting tooth and nail for our cause to kindly ensure in their petitions/arguments, including but not limited to the following requests:

1. Exempted/un-exempted organizations are on the same platform.
2. Clear-cut ruling as to people who retired on or before 1.9.2014 are covered for enhanced pension.
3. The differential amount payable to EPFO is without interest specifically (taking cue from MP, Indore High Court Order). If interest is included, then it should not be more than 6%, which the Madras High Court has observed on a simple interest basis.
4. If the amount due from the Pensioner is less than arrears, then EPFO should adjust the amount due from the Pensioner and pay the net amount to the pensioner. This will ease the hassle of recovery and paying, which will create a problem for the pensioners at the concluding part of their lives!
5. If the amount of the differential is more than the arrears dues, then EPFO should call for the net amount from Pensioners.
6. EPFO should send the calculation sheet to pensioners of EPS95 for necessary compliance within a month of the order.
7. Effective date of payment of arrears from EPFO should be made clear.
8. Effective date of enhanced pension should be within 3 months from the date of the order.
9. Minimum amount of Pension to EPS95 should be considered at Rs. 10,000/- or pension, whichever is higher, and should be linked with DA, etc., every year.

I do hope I have covered the points of concern of EPS 95 Pensioners. If any issue is left out, kindly add them in comments for our Ld Advocates to consider in their arguments.

Thanks and regards,

T S Narasimhan.

Thanks for your input. My suggestions for the issues to be taken up by advocates arguing the case are as follows:

1. EPFO should proactively calculate the arrears, eligible pension amount on clearing any differences, and the eligible date of commencement of arrears without waiting for any application from pensioners/subscribers. EPFO possesses all the records of subscribers, eliminating the need for subscribers to provide any details. EPFO has been using this tactic to delay action.

2. Pension orders should be issued immediately with detailed calculations. EPFO has been very opaque in this regard. The pension order should also specify the survivor pension amount.

Regarding the compensation for these advocates, I am willing to contribute. This forum could potentially serve as a catalyst for fund collection if needed.

I initially believed that the Supreme Court's judgment of 02/04/19, as reported in TOI dated 03/04/19 (attached), was the final decision. However, I have yet to obtain a copy of the SC order. If anyone has a copy, please share. Also, what are the expected issues for the order on 25/04/19?

Dear Mr. Raghavant, a nice suggestion indeed on hiring legal counsel! However, whether it is possible now, only a legal luminary can advise. The Supreme Court order dated 1.4.2019 was brief and concise.

For your information, the Supreme Court order ratified the Kerala High Court order of October 2018 and dismissed the SLP of EPFO. The details are as follows:

SLP D.9610/19

ITEM NO.33 COURT NO.1 SECTION XI-A
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
SPECIAL LEAVE PETITION (CIVIL) Diary No.9610/2019
(Arising out of the final judgment and order dated 12-10-2018 in WPC No. 602/2015 in WPC No.13120/2015 passed by the High Court of Kerala at Ernakulam)
THE EMPLOYEES PROVIDENT FUND ORGANISATION & ANR. Petitioner(s)
VERSUS
SUNIL KUMAR B & ORS. Respondent(s)
(With applications for delay in filing SLP, exemption from filing copy of the judgment, and interim relief)
Date: 01-04-2019 This petition was heard today.

CORAM:

HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE DEEPAK GUPTA
HON'BLE MR. JUSTICE SANJIV KHANNA
For Petitioner(s): Mr. Keshav Mohan, Adv.
Mr. Prashant Kumar, Adv.
Mr. Rishi K. Awasthi, Adv.
Mr. Santosh Kumar - I, AOR
For Respondent(s): Mr. Nishe Rajen Shonker, AOR
Mr. Anu K. Joy, Adv.
Mr. Alam Anvar, Adv.
Dr. K.P. Kylasanatha Pillay, Sr. Adv.
Mr. A. Venayagam Balan, AOR
Mr. V.S. Lakshmi, Adv.
Mr. Roy Abraham, Adv.
Ms. Seema Jain, Adv.
Mr. Himinder Lal, Adv.
Mr. E.M.S. Anam, Adv.
Upon hearing the counsel, the Court made the following order:

Heard learned counsel for the petitioners and perused the relevant material. Delay condoned. We find no merit in the special leave petition. It is, accordingly, dismissed. Any pending applications stand disposed of.

(Chetan Kumar) (Anand Prakash) A.R.-cum-P.S. Court Master

On 2.5.2019, issues regarding a review sought by EPFO, clarity on exempt and non-exempt organization, possibly on differential payments, interest, etc., are expected to be heard. There is also a contempt petition against EPFO scheduled for the same day. This might bring the long-awaited reprieve.

Regards

Interest Charged by EPFO on Differential Pension Contribution

With regard to the interest charged by EPFO over differential pension contributions, I would like to clarify that our RPFC office (Viz, Bhubaneswar) has provided a detailed calculation sheet of the differential amount with interest from 1995 to the date of deposit of the refund to each pensioner. From the said calculation sheet, it is clear that they have charged interest every month at the rate declared by EPFO for each year, e.g., 12% from Dec '96 to Jun '00, 11% from Jul '00 to Mar '01, 9.5% from Apr '01 to Mar '05, 8.5% from Apr '05 to Mar '10, 9.5% from Apr '10 to Mar '11, 8.25% from Apr '11 to Mar '12, 8.5% from Mar '12 to Mar '13, 8.75% from Apr '13 to Mar '15, 8.80% from Apr '15 to Mar '16, 8.65% from Apr '16 to Mar '17, and 8.55% from Apr '17 to Mar '19. Although I have been drawing a pension from 1.7.13 onwards (i.e., after retirement), EPFO has not charged interest at 6% on my differential amount. As I have already deposited the refund amount with interest as calculated by EPFO, I will first see how much arrear pension they are giving me. If they do not pay interest over my arrear pension from 1/7/13 until the release of the same, I will write to them to pay me the interest at the EPFO declared rate. I don’t find any logic or justification in not allowing the interest to me on arrear pension when they have taken interest at the said rate from me on a monthly rest basis from 1/7/13 till Mar '19.

Response from PF Authority

Regarding eliciting a response from the PF authority, I have been representing my case to the concerned RPFO with a copy to the Zonal Additional CPFC, APFC (Pen), HQ, EPFO, Delhi, and CPFC, HQ, EPFO, Delhi, and sending reminders to them every 10 to 15 days interval subsequently by email only. Of course, it will take some months.

Awaiting Supreme Court Verdict

Let us see what verdict the Supreme Court gives on 2/5/19.

Regards,
S.K. Hota
Bhubaneswar (Odisha)

Mr. Narasimhan/Mr. T.K. Madhu,

Kindly enlighten me about the Supreme Court's verdict on 2/5/19 on EPS pension.

Regards, S.K. Hota, Bhubaneswar

Mr. Narasimhan/Mr. T.K. Madhu,

Kindly enlighten about the Supreme Court's verdict on 2/5/19 on EPS pension.

Regards,

S.K. Hota,
Bhubaneswar
29th May 2019
From India, Calcutta

Dear Mr. T.K. Madhuji, I have not received any response from you to date. With reference to my post dated 29/4/19, I am to inform you that in the meantime, I have received enhanced pension from EPFO on 30/5/19 and arrear enhanced pension on 28/6/19 (I had deposited the refund amount with EPFO on 4/4/19). EPFO has charged PF interest at monthly rest as declared from year to year from 1/11/19 to 31/3/19 over my differential pension contribution, but in the arrear pension, they have not paid any interest over my arrear pension from 1/7/13 till 29/5/19. They have simply multiplied the enhanced monthly pension by the number of months from 1/7/19 to 29/5/19.

EPFO's Current Status on Enhanced Pension

Surprisingly, the EPFO regional offices have now put on hold the processing of cases for the disbursement of enhanced pension as per the verdict of the Hon’ble Supreme Court effective June ’19, in view of the review petition (Diary No.16281/2019) filed by EPFO against the order of the Hon’ble Supreme Court in the matter of SLP No.8658-8659 of 2019 (on EPFO’s appeal against the verdict of Kerala H.C. passed on 1/4/19). They are returning the refund amount already deposited by EPS pensioners, retired prior to 1/9/14. Even the Ministry of Labour, GOI, has also appealed against the verdict allowing higher pension proportionate to the salary, saying that there would be an additional burden of Rupees ten lakh crores. The S.C. has decided to consider the appeal of MOL together with the Review Petition filed by EPFO. The SC has adjourned the case to 5/9/19.

Confusion Among Retired EPS Pensioners

The present move by MOL & CPFO has created confusion amongst the lakhs of retired EPS pensioners of exempted establishments.

Request for Advice

In the circumstances, kindly advise whether I should write to EPFO to pay interest on my arrear enhanced pension from 1/7/13 till May ’19. Also, kindly enlighten me if any retired government employee has received his arrear pension after many years of his date of retirement, and if he has been paid interest on such arrear pension.

Request for Information from Fellow Members

I also request my fellow CITEHRians, those who have retired prior to 1/9/14 and got enhanced EPS pension from EPFO, to enlighten about the interest rate they were charged on their differential pension contribution from the date of their retirement till the disbursement of the first monthly enhanced pension and if any interest they have been paid over their such arrear enhanced pension.

Regards, S.K. Hota Bhubaneswar (Odisha) 28/7/19

It is interesting to see that two PF Offices in Kerala have already started paying pension based on actual salary without waiting for the Supreme Court verdict to come. I have a few friends in Trivandrum who were asked to pay back the difference amount of PF drawn and have started getting pension at enhanced rates.

Kerala Regional Offices and EPFO's Actions

Kerala regional offices have been prompt. In fact, in one of the circulars issued by EPFO to regional offices urging them to take action on applications received for enhanced pension, EPFO had drawn attention to the applications acted upon by regional offices, with Kerala being prominent.

Government and EPFO's Delay in Pension Issuance

In fact, the Government and EPFO have been desperately trying to delay issuing enhanced pensions. An appeal by the Ministry of Labour cites a fund requirement of 10 lakh crores. However, the Supreme Court, in its order, had specifically stated that the fund positivity can't be cited as a reason for stopping a welfare scheme.

Request for Information on EPS Pension Interest Rates

I again request my fellow CITEHRians, those who have retired prior to 1/9/14 and received an enhanced EPS pension from EPFO, to enlighten me about the interest rate they were charged on their differential pension contribution from the date of their retirement until the disbursement of the first monthly enhanced pension (i.e., REFUND AMOUNT). Additionally, if any interest has been paid by EPFO over their arrear enhanced pension from the date of retirement until the drawal of the enhanced pension, please share that information.

Regards,
S.K. Hota
Bhubaneswar, Odisha

Dear Madhu Sir / SK Hota Sir,

Thank you for all the contributions in this forum.

As of now, can the retiring employees get the enhanced pension as per the Supreme Court order? If they are not giving, is it because of the appeal by MOL and CEPFO? When is this case expected to be heard?

Would like to know if the PF offices are accepting applications for the enhanced pension and releasing the same.

Thanks,
Sreevalsan

I understand that EPFO will accept higher pension requests only when we produce a court order. However, that is not required because the dictum of the Supreme Court should be applicable to all citizens, for which separate orders are not required. If they object and do not pay the higher pension, then you will have to go to court, collect an order, and submit it to EPFO.

Eligibility for Enhanced Pension

Please find attached a statement showing the data on contributions to PF and Pension fund, along with details such as the establishments worked at and duration of service.

Please let me know if I am eligible for enhanced pension as per SC's orders. If so, what would be the approximate pension per month that I would receive? Additionally, what would be the approximate arrears that I would need to pay back to EPFO?

For your information, I submitted a prescribed application form duly filled with all necessary details and supporting documents from my former employers to the RPFC in Chennai two years ago. However, there has been no response from the RPFC thus far.

Despite my subsequent and repeated email reminders and phone calls to both the RPFC and the Chief PF Commissioner in New Delhi, I have not received any reply. I understand that the matter is currently under litigation.

Based on the statement provided, please inform me if I am eligible for enhanced pension. If your answer is affirmative, I will address the matter accordingly.

Thank you,
Anonymous

Eligibility for Higher Pension

The statement shows the total contribution over a certain period. To determine whether you are eligible for a higher pension, it is crucial to know the salary on which your employer contributed their share. If your employer contributed based on your actual salary, which was above Rs 15,000, you would be eligible to receive a higher pension based on that salary. Conversely, if contributions were made only on Rs 15,000, your pension would be based on Rs 15,000 only.

Dear Madhuji, it is shocking to receive the biggest blow by EPFO to stop payment of my enhanced pension (after the SC judgment on Mr. Gupta's Case in 2016) along with several colleagues who retired prior to 1.9.14. EPFO is sending notices to recover lakhs of rupees from us on the plea of excess payment of pension. This merciless action has been taken by the EPFO against the old pensioners after the 3-member SC Bench, headed by Justice U. Lalit, admitted the review petition filed by EPFO and the Central Labour Ministry against the above SC judgment of 2016.

What are your views on this action of EPFO, and what is the ruling of the SC held so far?

With Regards,
S.K. Hota

I would like to request all the community members (who retired prior to 1/9/2014 and received enhanced pension over actual wages after depositing arrear pension contributions from 16.11.95 until their retirement) to enlighten each other through this portal if they have now been denied the enhanced pension and asked to deposit the excess pension amount with EPFO. If so, what action have they taken or are planning to take?

Regards,
S.K. Hota
Bhubaneswar, Odisha

Yes, as per the Supreme Court judgment, there should be no differentiation between exempted and non-exempted organizations.

Yes, there is no distinction between exempt and non-exempt organizations.

On 4th November 2022, the Supreme Court ruled that there is no distinction between exempted and non-exempted organizations. Therefore, employees of exempted organizations will receive the same benefits as those in non-exempted organizations.

Yes, it is applicable for exempted organizations for enhanced pension. The Supreme Court made this clear through its order on 4th November 2022.

Best wishes,
Narasimhan TS