Calculation of Pension on Higher Wages on Pro-rata basis:
As per the report published in Telugu Daily “Eenaadu” today, it is reported that Circular was issued by EPFO ordering for calculation of Pension on Pro-rata basis in case of Pension on Higher Wages i.e.,
1) basing on last 12 months average for the period from 16-11-1995 or the Date of Appointment whichever is earlier,
2) Basing on last 60 months average for the period from 01-09-2014 to the Date of attaining 58 years.
The above formula is invalid due to the following reasons:
1) As per Page No: 22 of the report of the High-Empowered Monitoring Committee, there are 1,26,54,873 (26.57%) out of 4,76,23,287 Employees who are contributing to EPS,’95 inbetween 1,001/- to 2,000/- in between the period from April to August, 2018 (5 months).
At least 1,00,00,000 Employees out of 1,26,54,873 might be contributing exactly 1,250/- as Contribution (8.33% of 15,000/-) per Month from September, 2014.
Till August, 2014, the above 1,00,00,000 Employees contributed only 541/- (43.28% of 1,250/-) upto August, 2014.
Here no arrears of difference between 541/- and 1,250/- was collected from 16-11-1995 or from the Date of Appointment to 31-08-2014 was collected by EPFO as arrears of Contribution from Employees.
Hence, calculation of Pension on Pro-rata basis was implemented “only” in case of Pension upto Ceiling as per the Amendments carried out from 01-09-2014.
The Hon’ble Supreme Court in its Judgement of 4th November, 2022 “only” validated this part of the amendment.
In case of Contribution on Higher Wages, in all most all cases there may not be difference between the Contribution of August, 2014 and September, 2014, becasue there is no enhancement of D.A. linked to Cost of Living Index inbetween these two months.
There may be rare cases where the Employees might have earned Annual Increment or benefitted with Fixation due to Promotion or award of Stagnation Grade.
Moreover there is no mention of Pro-rata basis calculation in case of Pension on Higher Wages either in the Amendments carried out from 01-09-2014 or in the Judgement of 4th November, 2022.
2) In case of calculation of Pro-rata basis either for calculation of Penion upto Ceiling or on Full Wages, even the Non-Contributory period also should be split accordingly, i.e., 1) NCP days for the period from 16-11-1995 or the Date of Appointment whichever is earlier to 31-08-2014 and 2) for the priod from 01-09-2014 till the Date of attaining 58 years.
Thus there is no split in this column in PPOs which was issued either for grant of Pension upto Ceiling or on Full Wages.
3) EPFO already sanctioned Pension on Higher Wages in case of those who opted for Higher Pension basing on the Gazette Notification of 16th March, 1996 during the priod from 16-03-1996 and 30-11-2004, whenever the Employee attaining 58 years from 01-09-2014 till Date basing on last 60 months average Wages.
Then how can there be different formula in calcuation of Pension in case of those who are beneficiaries of the Judgement of 4th November, 2022, and who attained 58 years on similar dates.
Even in case it is on Pro-rata basis, the all these PPOs should be revised duly splitting the NCP period for the period prior to 01-09-2014 and on or after 01-09-2014. Is it possible now?
4) The Amendments implemented from 01-09-2014 includes deletion of Provision for Higher Pension from 01-09-2014.
Hence as per the Amendments, there will not be any Employee on rolls as on 01-09-2014 or got appointed on or after 01-09-2014 eligible for Higher Pension.
Hence EPFO prescribed Pro-rata basis calculation only in case of Pension upto Ceiling from 01-09-2014 which was clearly mentioned in the Amendments duly quoting the figures 6,500/- (Ceiling upto 31-08-2014) and 1,250/- (Ceiling from 01-09-2014).
G. Srinivasa Rao, Mobile No: 89851 72459 & WhatsApp No: 6300114361