In a startling disclosure, a recent letter from the Ministry of Labour & Employment has revealed that EPFO ignored a central government directive and, in doing so, undermined a 2022 judgment by the Supreme Court of India granting higher provident fund (PF) pension to eligible contributors. The letter alleges procedural lapses and mismanagement by EPFO, which prevented thousands from receiving the pension they were legally entitled to.The controversy centres on roughly fifteen lakh nine thousand four hundred seventy‑three (15,90,473) applications submitted by members seeking pension calculations based on actual wages, rather than the capped pensionable salary. According to the ministry’s correspondence, none of these claims have been approved so far indicating a systemic failure to implement the directives.
What the Ministry’s Letter Says: EPFO’s Procedural Lapses
The ministry’s letter, dated 31 May 2023, points out that although eligible employees and employers applied for pension on higher wages, EPFO never prescribed the required formats neither for applying nor for granting permission. Offices also failed to issue approvals, even while continuing to accept contributions on higher salaries. The letter calls this a self-created problem.Further, the ministry notes that pensions should be calculated based on the average salary of the last sixty months before retirement. Despite this, EPFO adopted a “pro-rata” method mixing pre- and post-2014 salaries, which substantially lowered pension amounts for many contributors. This methodology, per the ministry, undermines both the 2022 Supreme Court judgment and the government’s directive.
Impact: Thousands Await High‑Wage Pension, No Case Cleared
According to the ministry’s data, 1,590,473 applications or joint options had been submitted for the higher-wage pension scheme. As per the letter, not a single case had been cleared for higher pension rights meaning all applicants remain deprived of benefits despite legal eligibility.This large-scale inaction has left many retirees and soon-to-retire members in limbo, waiting for rightful pension enhancements based on their actual salaries. Analysts call this a major breach of trust and legal obligation by the pension authority.
Legal Backdrop and Court Orders on Pension Rights
The Supreme Court, in its November 4, 2022 judgment, reaffirmed that eligible EPFO members should receive pension based on higher wages if they and their employers contributed accordingly even if wages exceeded the previously capped limit.Following the ruling, employees were given a window to submit “joint option” applications for claiming higher pensions. But as revealed by the recent ministry letter, EPFO’s administrative failures and adoption of the pro-rata method effectively stymied the implementation of the highest court’s decision.
What’s Ahead: Pressure Grows for Accountability and Action
The ministry’s findings have triggered renewed calls from labour groups, pensioners and retirees for immediate action. With hundreds of thousands affected — from retired workers to contributors nearing retirement there is increasing pressure on EPFO to revise its pension calculations, clear pending applications, and issue higher pensions where due.
Some courts have already intervened: a recent ruling by the Calcutta High Court quashed EPFO orders that used internal trust‑rule ceilings to deny higher pension benefits — calling those actions unlawful.
Experts say EPFO must now act transparently, audit pending cases, and honour both government directives and court orders or face serious legal and moral consequences.
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