Kerala HC Offers Relief On Higher EPS Pension For Post-2014 Retirees: What It Means For Pensioners? | Savings and Investments News

If a higher pension claim has been rejected or calculated on the capped salary, retirees can now approach the EPFO for recalculation, citing this Kerala High Court ruling.

In a ruling that could bring major relief to thousands of pensioners, the Kerala High Court has held that members of the Employees’ Provident Fund (EPF) who retired after September 1, 2014, cannot be denied a higher pension under the Employees’ Pension Scheme (EPS) if their employers’ higher-wage-based contributions were accepted by the Employees’ Provident Fund Organisation (EPFO), even if there were procedural lapses or delays in remittance.

The verdict came in response to petitions filed by employees in Kerala whose higher pension claims had been turned down despite their employers having deposited contributions on actual salaries rather than the capped statutory ceiling. The EPFO had earlier rejected these claims, arguing that some payments were made in bulk instead of the prescribed month-by-month schedule.

The high court disagreed, saying that once the EPFO accepted the contributions, it could not later refuse to pay out the corresponding pension benefits. The bench ruled that “substantive rights must prevail over procedural technicalities”, asserting that administrative errors or timing irregularities cannot override the fact that valid contributions were made and received.

What the Judgment Means

The court’s decision offers much-needed clarity for retirees after September 1, 2014, who were previously denied higher pensions due to procedural discrepancies. It directs the EPFO to recalculate and disburse higher pensions within three months, based on the actual wages on which contributions were made.

While the order relieves employees of the burden of administrative errors, the Court made it clear that the EPFO retains the right to take action against employers if there were violations in the manner of contributions or remittances. However, such proceedings cannot be used as grounds to withhold benefits from employees.

Why the Case Matters

At the heart of the dispute is the difference between “statutory wage ceiling” contributions and “actual wage” contributions under the EPS. Historically, the EPFO capped pensionable salary at levels such as Rs 5,000, Rs 6,500, and later Rs 15,000 per month. However, some employees and their employers opted to contribute based on their full salary, expecting proportionately higher pensions upon retirement.

Many of these employees, especially those retiring after the 2014 amendments to the EPS, faced rejection of higher pension claims because their employers had deposited the additional contributions irregularly, often as bulk payments or after administrative delays.

The Kerala High Court’s judgment now clarifies that such procedural shortcomings cannot nullify an employee’s entitlement if EPFO has already taken the higher contributions into its accounts.

What Retirees Should Do

Experts say retirees who fall in this category, particularly those who left service after September 1, 2014, should immediately review their EPF and EPS passbooks to confirm whether their contributions exceeded the wage ceiling and whether EPFO accepted them.

If a higher pension claim has been rejected or calculated on the capped salary, retirees can now approach the EPFO for recalculation, citing this Kerala High Court ruling. Supporting documents such as salary slips, employer contribution proofs, and PF statements will strengthen their case.

However, retirees should also be mindful of limitation periods and procedural deadlines under the EPF Act before filing fresh claims or appeals.