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As per the Supreme court verdict EPFO should provide Pension on actual salary for employees and companies who would opt for it. A transfer of fund should be made on this account by EPFO. Can anyone enlighten that if it is applicable for Exempted Funds?
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This ruling applies only to employees of the 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 which use to contribute the employer share of PF on the actual salary. Mr B's PF qualifying salary was Rs 10000 and the employer share of 12% was deposited like, Rs 541 (8.33% of Rs 6500) to Pension Fund and the balance Rs 659 (ie, 1200 minus 541) to PF along with employee's share of Rs 1200. That means, though the share of employer was Rs 1200, the employer was permitted only to contribute Rs 541 to Pension Fund. At the same time he had contributed a higher amount to provident Fund, ie, Rs 659 as against Rs 367 (3.67% of Rs 10000). As per the Supreme Court verdict, the PF Organisation will have to rearrange the funds by transferring the additional amount of Rs 292 (Rs 659 minus Rs 367) from the PF account to Pension account so that the Pension Fund will become equal to 8.33% of Rs 10000 or Rs 833 (ie, 541 already deposited Plus Rs 292 now getting transferred) Now by doing this the Provident Fund will become Rs 367. If you have already withdrawn the PF, ie, Rs 659, obviously with your own share of Rs 1200, you have to refund Rs 292 to Provident Fund Organisation who will put this amount in your Pension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 higher salary, ie, Rs 10000, this will become the Pension qualifying salary. Obviously the pension will increase. If your PF qualifying salary had been even high, say Rs 60000 or Rs 100000, the pension would also go up. However, with the last amendment of 2014, the PF Organisation has put a ceiling on pension contributing salary to Rs 15000. Since then this has become Rs 15000. With this amendment the pension calculating formula has also been changed. Now, the actual contribution or Rs 15000 whichever is lower will be the base for pension calculation and for the period prior to Sept, 2014, the average of 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, ie, contribute Pf on Rs 6500 or Rs 15000, as the case may be.
Thanks for your valuable update . Is there any difference between PF funds managed by EPFO & PF fund managed by Trustees as EPFO is at present not allowing the Company's whose PF is managed by Trustees to come under the purview of Higher pension as per the ruling. They are only allowing unexempted establishments . Can you please highlight on this issue?
The present ruling does not make it applicable to members of exempted establishments. But there will be direction in this regard very soon.
Dear Madhuji,
Thanks a lot for your valuable information.
I have been drawing pension under the EPF&MP Act w.e.f.01/07/2014.My PF salary(earning) 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 their any circular issued by PF authority inviting applications from PF pensioners for claiming 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 till the cases pending in Kerala High Court are decided. I think we may have to wait for another couple of months to get a clarity.
EPFO has already issued a circular on 23.03.2017 which is attached, how ever regional offices are going slow on this siting lack gazete publication & verdict on some more cases pending in courts. However they have to ultimately pay the revised pension. The court in the order has already reprimanded EPFO for harassing subscribers. EPFO goes on the assumption that their function is to deny benefits to the subscribers , where as it should be to give as much benefit to subscribers as possible.
Though the SC order does not distinguish between exempted & non exempted categories EPFO is illegally trying to exempt '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 that epfo stops this illegal discrimination. Various pensioners' organisations have already taken this up & an on line petition to Labour minister is on . I request all on this board to google the petition & sign the petition.
Increased pension is also applicable to those who are already drawing pension. As per the circular there is a specified form which is not available on line but has to be obtained from local EPF offices. Currently in line with EPFO's mindset they are insisting that only those who apply will be considered & un officially they are also banking on pensioners not being able to pay the eps contribuition already returned along with epf accumulation. This difference will have to be first paid to EPFO, but since 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 & pay balance, but EPFO's mindset will not allow that & 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, may be EPFO may go bankrupt in the long run or may have to depend on Govt funding, govt will be forced because Govt only passed the law which the SC has rightly interpreted now. I request all off you on this board, pensioners & those who are still employed to go for it, pensioners go to the local office & submit specified form based on which EPFO will inform you about excess contribution to be paid & the 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.

Attached Files
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File Type: pdf epf circular on full salary 230317 Pension on full salary as per SC order 23.3.2017.pdf (1.24 MB, 411 views)

What is the current status of supreme court case for transfer of high court cases to it.
Very recently the Central PF Commissioner has issued a circular to all RPFCs saying that they should be ready to calculate the pension of higher wages at the earliest and it is also seen that the officers should not keep the files pending saying that they have asked for clarification from the Head Office. but the thing is that the software which calculates Pension is still to be modified and for the time being a lot of manual calculations are required to arrive at the pension figure. It should also be noted that no officer will take the risk of manual calculations.
Please find the attachment which a direction to the Regional PF Commissioners.

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File Type: pdf P F Pension on HigherWages -EPF Circular.pdf (486.3 KB, 410 views)

Dear All,
Is there any recent circular where Exempted PF employees can claim for revised Pension amount.
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