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EPFO Circular in a matter of Special Leave Petition on the topic of Higher Wages Pensions

The Employees Provident Fund Organization (EPFO) has issued a Circular on Special Leave Petitions on the topic of Higher Wages and Pensions.

The Circular Stated, “Hon’ble Supreme Court and directions of the Central Government directed as – The field offices should implement the directions contained in Para 44(iii) & (iv) read with Para 44(v) of the judgement dated 04.11.2022 of the Hon’ble Supreme Court within the stipulated timeline.”

As could also be seen, the Hon’ble Supreme Court has pronounced a judgement dated 04.11.2022 within the matter of Special Leave Petition (C) Nos. 8658-8659 of 2019. The related instructions of the Court concerning the above-mentioned topic are as follows:

“44 (iii) The employees who had exercised an option under the proviso to paragraph 11(3) of the 1995 scheme and continued to be in service as of 1st September 2014, will be guided by the amended provisions of paragraph 11 ( 4) of the pension scheme”.

“44(iv) The members of the scheme, who did not exercise the option, as contemplated in the proviso to paragraph 11(3) of the pension scheme (as it was before the 2014 Amendment) would be entitled to exercise option under paragraph 11 (4) of the post amendment scheme. Their right to exercise the option before 1st September 2014 stands crystallized in the judgment of this Court in the case of R.C. Gupta (supra). The scheme as it stood before 1st September 2014 did not provide for any cut-off date and thus those members shall be entitled to exercise the option in terms of paragraph 11 ( 4) of the scheme, as it stands at present. Their exercise of the option shall be like joint options covering pre-amended paragraph 11 (3) as also the amended paragraph 11(4) of the pension scheme. There was uncertainty as regards the validity of the post-amendment scheme, which was quashed by the aforesaid judgments of the three High Courts. Thus, all the employees who did not exercise the option but were entitled to do so but could not due to the interpretation of a cut-off date by the authorities, ought to be given a further chance to exercise their option. The time to exercise option under paragraph 11 (4) of the scheme, under these circumstances, shall stand extended by a further period of four months. We are giving this direction in the exercise of our jurisdiction under Article 142 of the Constitution of India. Rest of the requirements as per the amended provision shall be complied with”.

“44 (v) The employees who had retired before 1st September 2014 without exercising any option under paragraph 11 (3) of the pre-amendment scheme have already exited from the membership thereof. They would not be entitled to the benefit of this judgment.”

Accordingly, the workers who didn’t exercise choice as contemplated within the proviso to paragraph 11 (3) of the Pension Scheme (because it was earlier than the 2014 Amendment) can be entitled to exercise joint choice underneath erstwhile para 11 (3) & current para 11 (4) throughout the aforesaid prolonged interval of 4 months. The workers who had exercised choice underneath Para 11 (3) of EPS 1995 and continued to be in service on or after 01.09.2014 might be guided by the amended provisions of paragraph 11 (4) of the pension scheme, i.e. if they’d not exercised the option within the time specified underneath Para 11 (4), such workers shall not be eligible to exercise option throughout the prolonged interval of 4 months.

Therefore, in compliance with the Hon’ble Supreme Court judgement dated 04.11.2022, the following workers with their employers could submit joint choice underneath para 11 (3) and 11 (4) to the involved Regional Office:

i. The workers and employers who had contributed under paragraph 26(6) of EPF Scheme on salary exceeding the prevalent wage ceiling of Rs 5000/- or 6500/-; and

ii. didn’t exercise joint choice underneath the proviso to Para 11 (3) of the pre-­modification scheme (since deleted) whereas being members of EPS,95; and

iii. have been members previous to 01.09.2014 and continued to be a member on or after 01.09.2014.

The method through which such workers would apply to the involved Regional Office is as follows:

i. The request might be made in such kind and method, as could also be specified by the Commissioner.

ii. The joint choice will comprise the disclaimer and declaration as could also be specified therein.

iii. In case of share requiring adjustment from Provident Fund to Pension Fund, and if any re-deposit to the fund, specific consent of the worker might be given within the joint choice kind.

iv. In case of a switch of funds from exempted provident fund belief to the pension fund of EPFO, an enterprise of the trustee shall be submitted. The enterprise shall be to the impact that due contribution together with curiosity as much as the date of cost, might be deposited throughout the specified period.

v. In case of workers of unexempted institutions, refund of requisite employer’s share of contribution, the identical shall be deposited with curiosity on the fee declared underneath Para 60 of EPF Scheme, 1952, until the date of precise refund.

vii. The methodology of deposit and that of computation of pension will comply with via subsequent rounds.

vii. Aforesaid joint option should comprise the proof of remittance of the employer’s share in Provident Fund on larger wages exceeding the prevalent wage ceiling of Rs. 5,000/6,500 and proof of joint choice underneath Para 26(6) of EPF Scheme duly verified by the employer.