EPFO in its circular dated 25 January 2023 said “In order to stop over payment, if any, in respect of employees who had retired prior to 1st September 2014 without exercising any option under Para 11(3) or the pre amended scheme, and have been granted a pension on higher wages, their cases need to be re-examined to ensure that they are not given higher pension from the month of 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.”
Before going for the review of the higher pension of such members the department will send notices to the concerned members to prove their cases. “However, before 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 retirement prior to 1st September 2014,” said the circular.
As far as the matter of recovery of higher pension already paid to members to date is concerned EPFO intends to do it in a staggered and persuasive manner. “Further, any recovery which may arise after such revision should be done in a staggered and persuasive manner. The RPFC-I/ officer incharge of the region will be the competent authority to re-determine the pension entitlement and initiate recovery, if any,” stated the circular by EPFO.
The department has also asked its zonal and regional offices to screen all the cases of higher pensions that are not eligible for a higher pension based on SC judgement and take appropriate action. “ACC Zones and RPFCs of the regions are advised to ensure that pension on wages exceeding wage ceiling of Rs. 5000/- or Rs 6500/- is sanctioned/ continued only in cases which fall within the directions contained in Para 44(ix) read with Para 44 (vi) of Hon’ble Supreme Court judgement dated 04.11.2022. Accordingly, if in any case, pension was revised erroneously, such pension may be immediately stopped and restored to pension on wages up to the ceiling of Rs. 5000/- or Rs 6500/- only, in accordance with directions contained in Para 44 (x) read with Para 44 (V) of Hon’ble Supreme Court judgement dated 04.11.2022,” said the circular.
However, there were many members who got higher pensions by fighting court cases so EPFO plans to review their pension by obtaining relevant court orders citing the SC judgment. “Utmost care should be taken to identify such cases where higher pension was granted on account of judgement of any Court. In such cases, a favourable order shall be obtained from the concerned Court citing the order of Hon’ble Supreme Court dated 04.11.2022 before going ahead with stopping/ restoration of pension to wages up to ceilling of Rs. 5000 or Rs 6500.”
The EPFO circular quoted the relevant part of SC’s judgement while explaining its current move. The Hon’ble Supreme Court has pronounced judgement dated 04.11.2022 in the matter of Special Leave Petition (C) Nos. 8658-8659 of 2019. The relevant directions of the court with respect to above-mentioned subject are as follows. 44 (v) The employees who had retired prior to 1st September 2014 without exercising any option under paragraph 11(3) of the pre amendment scheme have already exited from the membership thereof. They would not be entitled to the benefit of this judgment. 44 (vi) The employees who have retired before 1st September 2014 upon exercising option under paragraph 11(3) of the 1995 scheme shall be covered by the provisions of the paragraph 11(3) of the pension scheme as it stood prior to the amendment of 2014. 44 (ix) We agree with the view taken by the Division Bench in the case of R.C Gupta (supra) so far as interpretation of the proviso to paragraph 11(3) (pre-amendment) pension scheme is concerned. The fund authorlties shall implement the directives contained in the said judgment within a period of eight weeks, subject to our directions contained earlier in this paragraph.”
Regional 3 In Provident this context, Fund Commissioner, the factual position Employees’ as narrated Provident in R.C. Funds Gupta Organisation & ors etc. & ors v etc. dated 04.10.2016 is as follows: –
3.1 Paragraph 4 of the above judgement states: ” The appellant-employees on the eve of their retirement he. sometime in the year 2005 took the plea that the provso brought in by the amendment of 1996 was not within their knowledge and, therefore, they may be given the benefit thereof, particularly, when the employer’s contribution under the Actt has been on actual salarY and not on the basis of ceiling imit of either Rs.5,000/- or 6,500/ per month, as the case may be. This plea was negatived by the Provident Fund Authority on the ground that the proviso visualized a cut-off date for exercise of option, namely, the date of commencement of Scheme or from the date the salay exceeded the ceiling amount of Rs.5,000/- or 6,500/ per month, as may be. As the request of the appellant- employees was subsequent to either of the said dates, the same cannot be acceded to.”
3.2 Relevant portion of Paragraph 8 of the above judgement states: “The said dates are not cut off dates to determine the eligibility of employer employee to indicate their option under the proviso to clause 11(3) of the pension scheme
3.3 Relevant portion of Paragraph 10 of the above judgement states: “If both the employer and the employee opt for deposit against the actual salary and not the ceiling amount the exercise of the option under paragraph 26 of the provident fund scheme is inevitable. Exercise of the option under paragraph 26(6) is a necessary precursor to the exercise of the option to the Clause under 113), Exercise of such option, therefore, would not foreclose the exercise of a further option under Clause 11(3) of the pension scheme unless the circumstances warranting such foreclosure are clearly indicated”.
While a large number of EPFO members, who were a member on or after 1 September 2014, are still waiting for it to come out with the guideline for applying the higher pension as per the Supreme Court judgement delivered on 4th November 2022, however, the department has been so far coming out with circular related to a part of SC judgement which has an impact on a limited number of members. The deadline of March 3, 3023 set by SC for eligible employees to apply for higher pension is coming close but the department has not come out with any guidelines in this regard.