EPFO head office flags ‘exceptionally high' rejection of higher pension applications

Indian Express

2 days ago

The Employees' Provident Fund Organisation (EPFO) head office has written to its field formations flagging the 'exceptionally high' rejection of application vis-à-vis issuance of demand letters in the case of higher pension cases. The missive, dated May 23, has come after the Ministry of Labour and Employment instructions to the retirement fund body to undertake an audit for all such cases of rejection of higher pension applications.
A total of 17.49 lakh applications were received for the higher pension option after the Supreme Court directed the EPFO to open a window for pensioners and members to apply for it. Out of the 17.49 lakh applications, 1.02 lakh applications were referred back to employers for complete information and demand letters were issued to 3.68 lakh applicants as of March 31 this year, an official told The Indian Express.
Over 1 lakh pensioners have deposited the additional amount sought by the EPFO and over 47,000 members, who are still in service, have also deposited the higher amount, the official said. As per the data at the end of the previous financial year, the EPFO has issued over 34,500 pension payment orders (PPOs), out of which around 19,000 are in process, the official said.
In its letter, the EPFO head office stated that it has received numerous grievances from stakeholders regarding the rejection of applications due to minor deficiencies that could have been rectified by employers if they had been provided with adequate guidance and opportunity to address them.
'Arbitrary rejections at various offices have resulted in a number of complaints and have made it difficult for the Head Office to respond effectively. Officers are advised to ensure that applications are processed strictly adhering to the guidelines and instructions provided by the head office. Rejections should be based on substantial and justifiable reasons, and applicants must be given adequate opportunity to rectify minor deficiencies in their submissions. Employers and employees should be adequately facilitated to comply with the requirements, thereby ensuring fair and efficient processing of applications,' the letter stated.
The SC in a ruling on November 4, 2022 had upheld the amendments to the Employees' Pension (Amendment) Scheme, 2014, providing another chance for employees who were existing EPS members as on September 1, 2014, to contribute up to 8.33 per cent of their 'actual' salaries — as against 8.33 per cent of the pensionable salary capped at Rs 15,000 a month — towards pension.
Applications that are complete with the required information are processed and demand letters issued by the EPFO indicate the additional due amounts to the pension fund. If the applicants for higher pension under EPS have the due amount available in their provident fund accounts maintained with the EPFO, then only a diversion is required. In cases where the due amount is not available with the EPFO, then it has to be deposited by the member directly or through the employer.
In the letter sent last week, the EPFO head office also pointed out instances of rejections wherein the exempted provident fund trust rules did not contain any explicit bar on contribution to EPS 95 beyond wage ceiling or cases where the interpretation of the term 'wages' have been interpreted incorrectly. 'There are even references where the process of verification has been converted into a probing exercise to look out for justification for rejection of applications,' it said.
The EPFO letter noted that the Ministry of Labour and Employment has asked the retirement fund body to carry out an audit by a specialised team of chartered accountants empanelled under Comptroller and Auditor General (CAG). The EPFO might also deploy its own audit teams to examine cases of rejection, especially those which are under litigation, it said, asking officers to review the cases and take necessary action.
Earlier, in January this year, the EPFO head office in a letter to its field offices had said that despite issuance of several circulars and clarifications to facilitate the prompt disposal of higher pension applications, the 'overall progress remains below expectations due to delays in disposal of applications'. The EPFO head office had set fresh deadlines of January 24 and February 7 for its field offices to complete processing of the higher pension applications. 'For offices having less than 5,000 applications with joint options, the final deadline for completing the examination of all pending applications will be January 25, 2025. For all other offices the deadline is set for February 7, 2025. All clear cases for PPO issuance should be completed at all offices by January 24, 2025,' the EPFO chief had said in his letter.
Nov-end 2024
Mar-end 2025
Demand letters issued
1.19 lakh
3.68 lakh
Pension Payment Orders
16,282
34,500
Aanchal Magazine is Senior Assistant Editor with The Indian Express and reports on the macro economy and fiscal policy, with a special focus on economic science, labour trends, taxation and revenue metrics. With over 13 years of newsroom experience, she has also reported in detail on macroeconomic data such as trends and policy actions related to inflation, GDP growth and fiscal arithmetic. Interested in the history of her homeland, Kashmir, she likes to read about its culture and tradition in her spare time, along with trying to map the journeys of displacement from there.
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