Concerns arise as EPFO stops higher pensions for pre-2014 retirees

The latest circular states that “in order to stop over payment, if any, in respect of employees who had retired prior to September 1 2014, without exercising any option under Para 11(3) or the pre-amended scheme, and have been granted a pension on higher wages, their cases need to be re-examined to ensure that they are not given higher pension from the month of January 2023 onwards”. “Pension in such cases may be immediately restored to pension on wages up to the ceiling of Rs 5,000 or Rs 6,500,” it said.

The circular has raised concerns about lower pension benefits to EPF subscribers who had earlier been getting higher pension payout based on higher actual wages than the basic wage. Officials said such a circular with a retrospective effect could lead to further legal petitions on the issue and result in administrative delays in furnishing pensions as per new norms.  The EPF has directed its officers to issue an advance notice to the pensioner and provide an opportunity to prove the choice of option to the subscriber before revising any pension entitlement.

“Further, any recovery which may arise after such revision should be done in a staggered and persuasive manner,” it said.

“Utmost care should be taken to identify such cases where higher pension was granted on account of judgement of any Court. In such cases a favourable order shall be obtained from the concerned Court citing the order of Hon’ble Supreme Court dated 04.11.2022 before going ahead with stopping/restoration of pension to wages up to 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), seeking clarity on details including the formula to calculate pension, and the options available to subscribers who retired after September 2014. On November 4, SC had upheld the Employees’ Pension (Amendment) Scheme, 2014, allowing another opportunity to EPF members who have availed of the EPS, to opt for higher annuity over the next four months. Employees who were existing EPS members as on September 1, 2014 can get the chance to contribute up to 8.33 per cent of their ‘actual’ salaries — as against 8.33 per cent of the pensionable salary capped at Rs 15,000 every month — towards pension, it said.