EPFO head office flags concerns over delay in finalising higher pension cases

Union Minister of Labour and Employment Mansukh Mandaviya has been taking regular meetings with EPFO officials to review the status of higher pension cases. Pending applications of over 1 lakh cases have been examined in the past month and 21,000 demand letters have been issued, the EPF’s Executive Committee had discussed in a meeting on Saturday. “The disposal of cases has increased by approximately 58,000,” the Ministry of Labour and Employment said in a statement after the meeting.

The EPF Executive Committee under the Ministry has recommended holding regular video conferences with employers to speed up the correction in reverted cases and their submission of joint options for which the last date is January 31, 2025. “It was directed to complete maximum work within the approved framework by the end of the current fiscal year. Cases involving high amounts pertaining to PSUs were directed to be expedited as well,” it said.

The EPFO head office in its latest letter said the progress in disposal of pension on higher wages has been reviewed, and it is disappointing to note that, with few exceptions, most offices are “significantly lagging in finalising cases”. “A recent performance review conducted by the pension division, particularly for offices handling fewer than 5,000 applications with joint options, revealed substantial delays. The missed deadline of January 10 by many offices is particularly concerning,” the letter stated.

The letter also said that the delays in finalising higher pension cases is the “lack of setting appropriate priority to this area”. “It is made clear that this area of work must be accorded highest priority along with the task of activation of UANs. Raising repeated frivolous issues, which could be addressed by RPFCs or Zonal ACCS, should be avoided. Officers must actively engage with their Zonal Commissioners to resolve such issues promptly,” it said.

Pro rata pension formula

Meanwhile, in another set of clarifications, EPFO has stated that it will use the pro rata method for calculation of pension on higher wages. “The pro-rata calculation of pension is provided in Para 12 of the EPS and is equitable, treating both categories of pensioners i.e. pensioners under wage ceiling and those with higher wages on an equal footing. Further, the Hon’ble Supreme Court had also not found the same ultra-virés. Accordingly, MoL&E has agreed with the computation of pension on pro-rata basis for the pension on higher wages cases,” it said.

As per the EPFO, there is no separate formula in EPS, 1995 for calculation of pension on higher wages and ordinary EPS members. Therefore, the pension formula, which calculates the pensionable salary by multiplying the pensionable service by the salary, divided by 70 will be calculated separately for the period prior to September 1, 2014 and post that.

For pensionable service prior to September 1, 2014, pro-rata pensionable salary will be the highest monthly salary prior to the date, or 60 months average of salary preceding the date of exit from the membership of the pension fund, whichever be less. For pensionable service post September 1, 2014, pro-rata pensionable salary will be the highest monthly salary post that date or 60 months average of salary preceding the date of exit from the membership of the pension fund, whichever be less.