Can EPFO Now Deny Higher Pensions To You?

Worried if EPFO will grant you higher pensions? A recent ruling of Kerala High Court is good news for you! Under Paragraph 26(6) of the EPF Scheme, 1952, the court has ruled that people must get higher pensions. This applies to cases of people who made lump-sum contributions and where delayed payments were accepted.

Background of the Case against EPFO

The case was filed by 4 retired employees from a small co-operative milk producers union in Kerala. During their service period, they had made EPS contribution on their full salary, and not the statutory wage ceiling. Their employer had also made matching contributions.

However, the EPFO rejected their application for higher pension. It cited that some of their contributions were not made on a monthly basis between 2004 and 2008.

Kerala High Court’s Observations and Ruling

Justice Murali Purushothaman ruled in favour of the petitioners. The bench stated that under under Paragraph 26(6) of the EPF Scheme, 1952, denying higher pensions to people was unjustified. Since both employees and the employer had contributed to EPS, and the EPFO had accepted those contributions, the demand for higher pension was correct.

Paragraph 26(6) of the EPF Scheme, 1952

Para 26(6) allows employees and employers to contribute to EPF on actual salary beyond the statutory wage ceiling, provided both parties agree. The judge emphasised that procedural delays or lump-sum contributions cannot be used as grounds to deny pension benefits when all conditions were otherwise met.

Conclusion

This Kerala High Court decision is expected to have far-reaching implications. It sets a strong precedent in favour of employees and could influence similar cases across other High Courts. More importantly, it underlines the principle that procedural formalities should not override genuine efforts made by employers and employees in good faith. 

Read more on: EPFO: Employers Can Now Pay Old EPF Dues via One-Time Demand Draft

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