Now Reading: Calcutta HC strikes down EPFO pro-rata pension method
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Calcutta HC strikes down EPFO pro-rata pension method
The Calcutta High Court has quashed the Employees' Provident Fund Organisation's pro-rata method for calculating higher pensions, calling it unlawful. The court struck down an EPFO circular dated February 14, 2024, that…
The Calcutta High Court has quashed the Employees' Provident Fund Organisation's pro-rata method for calculating higher pensions, calling it unlawful. The court struck down an EPFO circular dated February 14, 2024, that mandated this calculation method. The order came on a petition by the Sabdarnagar Education and Welfare Society.
Under the EPFO's pro-rata system, an employee's service period was split into two parts, before and after September 1, 2014, which drastically reduced the final pension amount. The correct rule requires higher pension to be based on the average salary of the last 60 months of service.
This is the third High Court to rule against the pro-rata formula. The Himachal Pradesh High Court and the Punjab and Haryana High Court have also struck it down, but the EPFO has appealed both decisions. Pensioners continue to wait for relief as the trust challenges each verdict.
Indian Opinion Analysis
The EPFO introduced the pro-rata method after the Supreme Court's 2022 ruling that allowed employees who had opted out of the pension scheme to rejoin it. The method effectively capped the pensionable salary at Rs 15,000 for the period before September 2014, even for employees who had been contributing on a higher salary. With three High Courts now calling the method illegal, the question is whether the EPFO will challenge this ruling too, or finally revise its circular. The next step is likely an appeal before a Division Bench of the Calcutta High Court, where the pensioners' wait for actual payment will continue.
Source: english.mathrubhumi.com
This brief was synthesised by AI from the source linked above.
