Calculation of Pension on Higher Wages on Pro-rata basis.

Calculation of Pension on Higher Wages on Pro-rata basis.

EPFO estimated that there are 1,03,00,000 Employees (not Pensioners) eligible for Pension as on 31-03-2019 with average Wages of 75,328/- and average Past service of 7.29 years.

Here as per EPS,’95, Past Service is Contributory service under EFPS,’71, the Pension on which is very insignificant when compared to the Higher Pension calculated on the contributions under EPS,’95 from 16-11-1995 till the date of attaining 58 years.

Hence here “Past Service” means average contributory service under EPS,’95.

The liability due to Higher Pension for these 1,03,00,000 employees got assessed by the Actuary and submitted to Hon’ble Supreme Court as Additional Affidavit on 5th August, 2022. (Page No: 307, 308 of the Affidavit)

Further there are 92,55,580 Employees (not Pensioners) from Exempted Establishments as on 31-03-2017.

EPFO asked the Actuary to assess the liability for Higher Pension and submitted the same to the Hon’ble Supreme Court as Page No: 410 of the 427 Page Affidavit to the Hon’ble Supreme Court on 20th March, 2021.

Actual Joint Options received are 7,21,674 from Exempted establishmments and 6,17,055 from Unexempted establishments. I. e., total 13,38,729.

Here, when compared to the Joint options of Exempted Establishments, the Joint Options received from Un Exempted Establishments are high.

Because, in most of the Un exempted establishments the Employer’s contribution is only upto Ceiling. Hence many Joint options in this category will be eliminated.

Even as per the available information, around 230 Joint Options submitted by the Pensioners of APCO, Andhra Pradesh were rejected by EPFO. APCO is an Exempted establishment.

After elimination of Joint Options, the net eligible Options may be around 10,00,000 or even less.

Even these 10,00,000 Joint Options includes, Pensioners and Employees.

No bifurcation was shown by EPFO when supplied the information to CBT members and Press on 31-10-2023, when the CBT meeting was held.

Against Pensioners and Employees are to be separated year wise.


In case of Pensioners, the separation is with regard to 2014 (01-09-2014 to 31-12-2014), 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023.

Likewise Employees who opted for Higher Pensions to be separated yearwise i. e., from 2024 onwards.

Employers wanted time till 31st December, 2023, to submit wage particulars which was considered by EPFO.

Hon’ble Supreme Court not prescribed any time line for sanction of Higher Pension.

Even after issuing the Circular on 01-06-2023 regarding the formula for calculation of Higher Pension, if EPFO has to change the formula again, which it cannot, it has to revise the Higher Pension Orders of those who opted as per Gazette Notification of 16th March, 1996 and opted in between 16-03-1996 and 30-11-2004.

EPFO has to pay more Pension if resorted to Pro-rata basis even to those who attained 58 years subsequent to 01-09-2014, when the Contribution period is less for the period from 01-09-2014 to the date of attaining 58 years when compared to the Contributon period from 16-11-1995 to 31-08-2014.

Example 1
Date of attaining 58 years: 31-08-2015.
a) 12 months average for the period from 16-11-1995 to 31-08-2014: 18 years, 9 months and 15 days.
b) 60 months average for the priod from 01-09-2014 to 31-08-2015: One year.

Example 2:
Date of attaining 58 years: 31-08-2016.
a) 12 months average for the period from 16-11-1995 to 31-08-2014:
18 years, 9 months and 15 days.
b) 60 months average for the period from 01-09-2014 to 31-08-2016: 2 years.

and so on……

Non-Contributory period is also to be bifurcated from 16-11-1995 to 31-08-2014 and from 01-09-2014 to the date of attaining 58 years.

Hence any change in computation can be effected only to those who are going to attain 58 years on or after 01-01-2024 onwards in the least.

By EPFO clarification is was made clear that arrears are being paid along with Higher pension

For any delay, it is the EPFO which is the beneficiary in the form of interest for late payment of arrears along with higher Pension and also interest earned on the difference amount already deposited.

G. Srinivasa Rao, Mobile No: 89851 72459 & WhatsApp No: 6300114361.