Re-Examination Of Cases Of Pension On Higher Wages In Respect Of Employees Who Had Retired Upto September 1, 2014

The Hon’ble Supreme Court pronounced its judgement dated 04.11.2022 in the Special Leave Petition (C) Nos. 8658-8659 of 2019, upholding the validity of the Employees’ Pension (Amendment) Act, 2014. In its judgement, the Supreme Court inter alia held that the employees who had retired prior to September 1, 2014 without exercising an option to contribute pension on higher wages under paragraph 11(3) of the pre-amendment scheme, will not be entitled to the benefit of the judgement.

In this regard, the Employees’ Provident Fund Organisation (EPFO), in continuation to its Circulars dated 29.12.2022 and 05.01.2023, has issued a new Circular[1], and clarified that-

(a) in order to stop overpayment, if any, in respect of employees who had retired before September 1, 2014 without exercising any option under Para 11(3) or the pre-amendment scheme, and have been granted pension on higher wages; their cases need to be re-examined to ensure that they are notgiven a higher pension from January 2023 onwards. Pension in such cases may be immediately restored to pension on wages up to the ceiling of Rs. 5000/- or Rs. 6500/- as the case may be.

(b) Prior to revising any pension entitlement, an advance notice should be issued to the pensioner so that he/she has an opportunity to prove the exercise of option under Para 11(3) before his/her retirement prior to September 1, 2014.

[1] No. Pension/2022/55893/15785 dated January 25, 2023