Deferred Higher Pension: How EPFO Denied Two Years’ Arrears and Collected Excess Contributions from Retired Employees

This is a post from Srinivasa Rao, Senior EPS 95 Pensioner.

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” How come EPFO so generous in sanction of “Defered Higher Pension”

1) Gazette Notification No. 440(E) of 25th April, 2016, 2) EPFO/Head Quarters Circular No: Pension – I/L&D/17(4)/2016, Dt: 10-06-2016, besides 3) clarification given in Live Session conducted at New Delhi with the Employees/Executives of Central Public Sector Undertakings conducted in New Delhi in the second half of 2024 which called SCOPE in abbreviated form, by Additional Central Provident Fund Commissioner (Pensions) Smt Aparaajitha Jaggi, amply make it clear that “Deferement of Pension is “not” applicable to Pension on Higher Wages but for only Pension upto Ceiling.

Many employees in Central Public Sector Undertakings where the retirement age is 60 years and who attained 58 years before the delivery of the Judgement of 4th November, 2022, opted for Deferement of Pension up Ceiling at 60 years “with Contribution” or “without Contribution”. Accordingly they were sanctioned Pension upto Ceiling as per the Options of “With Contributions” and “Without Contribution”.When they became the beneficiaries of the judgement of 4th November, 2022, and applied OnLine for Higher Pension, EPFO simply issued Demand Notice for payment of Difference of Contribution between the Ceiling and Higher Wages with interest upto 60 years duly charging extra two years of the difference for 59th and 60th year i.e., for 24 months extra and sanctioned Defered Higher Pension which is not allowed. At the same time denied arrears of Pension for two years i.e., for 59th and 60th years. This caused immense loss to the employees.

This is the case with so many Employees/Executives of Natural Gas and Oil Coporation (ONGC).

When the option is without contributions for Pension upto Ceiling”:

The employees Pension upto Ceiling is calculated basing on Contributions received upto 58 years and by adding 4% every year falling short of 60 years, he will be sanction Pension upto ceiling with more than 8%

When it is with Contributions upto 60 years, the Pensionable Service is taken upto 60 years “without” adding 4 each year falling short of 60 years.

Here, naturally for most of the employees where the retirement is 60 years and when they opt for Pension upto Ceiling upto 60 “without Contribution” , they loose two years of arrears. Here the monthly interest on two years arrears is much more than 8% the employee gets as long as he lives and thereafter 50% to the nominee.

Incase of Option for Deferement of Pension with Ceiling with Contribution, EPFO only takes 60 months average from 56th to 60th year (5Years). When the Ceiling is 15,000/- and the employee opts for Deferement, there is no change whether its is taken to 54th to 58 years or 56th to 60 years, where the average comes in these two cases is 15,000/-. Further he is not allowed 4% extra for every year falling short of 60 years.

Thus even for opting for Deferement of Pension upto Ceiling it is loss in either way.

But, EPFO is so generous, that it applied Deferement to Pension on Higher Wages automatically when the employees applied OnLine for Higher Pension, while he was already drawing Pension upto Ceiling with Deferement either with or without Contribution.

EPFO has caused great injustice to these employee by sanctioning authmatically Pension on Higher Wages.

1 Denied two years of arrears for 59th and 60 year.
2 Collected extra difference for 59th and 60th years
3 Interest charged is from 16-11-1995 or the Date of Appointment whichever is
later upto 60th year instead of 58 years.

This was done silently by EPFO because it benefits EPFO even the Gazette Noticiation, Circular, and clarification in the Live Session does not allow this.

On the other hand when an Establishment is Unexempted, the Provident Fund Accounts and Pension Accounts are being maintained by EPFO, when the Employee of that Establishment became eligible for Higher Pension as a Beneficiary of the Judgement of 4th November, 2022, he was asked to produce Challans and other Statement which the concerned Unexemptedestablishment already submitted every month while remitting Higher Contributions under Provident Fund and EPFO settled his Provident Fund Account before the delivery of the Judgement of 4th November, 2022, EPFO again asking the same particulars to sanction his Pension on Higher Wages. This is purely harassment of the Employees. In this regard some Employees were forced to knock on the doors of the Court to get favourable Order by unnessarily forced to spend money on Court expenses.

Thus, when it suits EPFO is generous, but it is rigid when it does not suit it.

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