The Kerala High Court, on Wednesday, held that the Employees' Provident Fund Organisation (EPFO) cannot deny a higher pension to the subscribers who contributed to the scheme based on full salary merely on the ground of delayed contributions.
The High Court was hearing the petitions by four retired employees of the Thiruvananthapuram Regional Co-operative Milk Producers Union.
The HC said that even if the payments for higher pension were made in bulk or delayed, EPFO's reason for denying higher pension was invalid. It was found that the four employees and their employer contributed to the EPF scheme based on full salary for most of their service period. They made equal contributions to the fund, as mandated under the EPFO rules. However, the central agency held that the employees were not eligible to receive a higher pension as their payments for some months, between 2004 and 2008, were made in bulk, not on a monthly basis.
However, the HC held that the EPFO "cannot deny the petitioners the benefit of a higher pension" after accepting the contributions.
Favouring the petitioners, the court observed: “Admittedly, the Employees Provident Fund Organisation has received contributions from both employees and employers under Para 26 (6)...for the period 2004–2005 to 2007–2008.”
According to the HC, even though certain payments were made in bulk, the employer later provided a month-wise breakup for those contributions. Confirming their compliance, the court noted both the employees and the employer met all the EPFO rules. It also noted that despite the bulk contributions, the EPFO accepted them, and now cannot deny the petitioners' eligibility for higher pension benefits.
The pension agency has been asked by the court to disburse the payments to the four retired dairy employees within three months.
The judgment is a big relief for lakhs of employees who contribute to EPF every month, hoping for a secure and assured pension after retirement.
During the service period, the employees can also make contributions to the EPF scheme over and above the mandated 12% of the employee's basic salary and dearness allowance (DA). Many EPF subscribers make higher contributions on the basis of their total salary to increase their pension payout after retirement.
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