Kozhikode: The Employees’ Provident Fund Organisation (EPFO) has decided to revise pensions for those who filed a petition in the Himachal Pradesh High Court, challenging the pro-rata stipulation that led to a steep reduction in higher PF (Provident Fund) pension rates. The authorities have formally intimated this decision to the court, along with supporting data.

Following this, a Division Bench comprising Chief Justice GS Sandhawalia and Justice Ranjan Sharma granted a stay on contempt of court proceedings initiated against the EPFO. Although the order is not applicable nationwide, the stance taken by the EPFO in a case where the Central PF Commissioner is among the respondents has sparked new hope among pensioners across the country.

The petition was filed by three individuals, including Ranjiv Paul, a retired employee of the Himachal Pradesh Power Corporation, who argued that their pensions had been unfairly reduced due to the pro-rata condition. On September 9, a Single Bench of the High Court ruled that the EPFO’s action was unauthorised and amounted to contempt of court. The court directed the EPFO to correct the anomaly within 10 days and ordered its officials to appear in person on September 23 to explain why contempt proceedings should not be initiated.

Subsequently, on September 19, the EPFO approached the Division Bench seeking relief from contempt action. In doing so, it submitted detailed calculations of the revised pension amounts, including arrears, based on an assessment that excluded the pro-rata stipulation.

Pension loss under pro-rata up to 35%
The pro-rata condition has fixed the average salary to be considered for pension calculations at a maximum of ₹6,500  till August 31, 2014 and ₹15,000 thereafter. This restriction, however, was not meant to apply to those paying monthly contributions for higher pensions linked to their actual salaries.

Contrary to this position, the EPFO applied the condition even to this category, triggering widespread legal disputes across the country. By splitting the salary into two periods for calculation, pensions were reduced by as much as 35 per cent.

Commenting on the development, R Sanjith, a lawyer at the Kerala High Court, said the EPFO’s latest decision effectively acknowledged the court’s view that the pro-rata condition was unjust and amounted to contempt of court. “However, the EPFO has still not informed the court about withdrawing its internal circular issued on January 18 this year, which imposed the pro-rata condition on higher pensions. Had that been withdrawn, the relief would have automatically extended to all PF pensioners. Even so, this latest order will strengthen the ongoing cases in other courts,” he noted.