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The Employees’ Provident Fund Organisation (EPFO) head office has written to its field formations expressing concern over “substantial delays” in finalising cases of pension on higher wages under the Employees’ Pension Scheme. In a letter to EPFO’s field offices, Central Provident Fund Commissioner (CPFC) Ramesh Krishnamurthi has stated that despite issuance of several circulars and clarifications by the EPFO head office to facilitate the prompt disposal of higher pension applications, the “overall progress remains below expectations due to delays in disposal of applications”.
“This is a matter of serious concern, especially since the Supreme Court has set a clear timeline for concluding this exercise,” Krishnamurthi said in a letter dated January 17. The EPFO head office has now set fresh deadlines of January 24 and February 7 for its field offices to complete processing of the higher pension applications. “For offices having less than 5,000 applications with joint options, the final deadline for completing the examination of all pending applications will be January 25, 2025. For all other offices the deadline is set for February 7, 2025. All clear cases for PPO (Pension Payment Order) issuance should be completed at all offices by January 24, 2025,” the EPFO chief said in his letter.
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.
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.
